Katrina's trail of destruction spiralling towards $100bn
By Andrew Cave (Filed: 05/09/2005)
Total losses from Hurricane Katrina in the US are likely to make it the costliest natural disaster in history, according to analysts.
Consultancy firm Risk Management Solutions says the losses from flooding in New Orleans, wind damage, coastal surges, battered infrastructure and indirect economic effects could total more than $100billion (£55billion).
Analysts also believe the crisis will prompt further increases in petrol prices.
Sheikh Ahmad, chief of Opec, said yesterday the 11 cartel members were increasing production to 30.4m barrels a day to build stockpiles to help ease prices.
In terms of insurance losses, industry forecasters are predicting payouts of at least $25billion. That would make Katrina more costly than Hurricane Andrew, which resulted in insurance losses of $21billion in 1992.
Lloyd's of London said reports that the insured costs for Katrina would exceed $40billion were premature and based on disaster modelling carried out before the hurricane. Last week, some leading Lloyd's Names forecast a hit for the London market of £1billion-£2billion.
Lloyd's said it expected "significant" claims but would not have a firm idea until September 12, the deadline for underwriters to submit their estimates.
Chris Soffe, US president of Gleeds, a London-based chartered surveying firm, said it had been asked to assess damage on behalf of two major clients.
He said: "I suspect that $100billion is a bit light because the devastation down there and the amount of time it will take to get everything running is way more than the damage wreaked by the hurricanes in Florida last year, which are estimated to have cost $27billion-$30billion.
"The environmental effects are going take a very long time to deal with. Everything will have to be decontaminated and the economic hit in terms of business interruption costs and loss of business is going to be enormous."
Separately, the bus operator Stagecoach said it was sending 24 drivers and 12 coaches from its Coach USA division to help evacuate the thousands of people made homeless.