Swiss Reinsurance Co. said Wednesday that the strong earthquake in Chile last month will cost the insurance industry as much as $7 billion, an estimate shared by its Germany-based rival Munich Re AG, according to the Associated Press.
Swiss Re said it is common practice for property owners in Chile to buy earthquake insurance, meaning the temblor would result in significant claims for property damage and disruption of business, AP reported.
The 8.8-magnitude earthquake and a subsequent tsunami killed more than 450 people and damaged hundreds of thousands of buildings.
Zurich-based Swiss Re said it alone expects to make a pretax payout of $500 million for losses arising from the Feb. 27 quake.
Munich Re estimated the total insured losses from the storm at between $2 billion and $3.4 billion.
