Insurers face record payouts, and some will experience record losses, after Hurricane Katrina laid waste to the US Gulf Coast last week. Early estimates of the total damage bill – the accuracy of which are likely to be billions of dollars astray – start at around $US35 billion and rise sharply.

The highly respected Risk Management Solutions puts total losses at $US100 billion, with insured losses at $US20-35 billion. That seems to be the figure most insurers are quoting. Reinsurance giant Swiss Re estimates total insured losses at around $US20 billion.

Business interruption losses could be very large – as much as $US100 million a day. US reports say the biggest providers of business interruption include St Paul Travelers, Zurich and State Farm.

Katrina has dwarfed the damage bill of 1992’s Hurricane Andrew, which to now has been the most expensive natural catastrophe experienced by US insurers, who paid out $US20.8 billion.

Lloyd’s says it expects to receive significant insurance claims, predominantly in relation to offshore energy installations in the Gulf of Mexico, as well as property damage and business interruption.

Residents of New Orleans – who lived in a natural bowl between the Mississippi River and a major lake system – won’t be making flood claims. It’s a standard exclusion for property policies in the city.

Munich Re says it may have claims of up to €400 million ($652.7 million), and Swiss Re expects claims of about $500 million. 

Ironically, the US insurance industry’s regulators – the National Association of Insurance Commissioners – were scheduled to meet in New Orleans on Saturday. The commissioners have rebooked elsewhere.