Insurers face £7.6bn Charley bill

HURRICANE Charley is expected to leave the insurance industry with its second-biggest storm bill ever as underwriters brace themselves for a claims deluge over the coming weeks.

Munich Re, the world's largest reinsurer, has put the total amount of damage done by the worst hurricane to hit the US for a decade at $20bn (£10.9bn) and believes it may cost insurers as much as £7.6bn.

That puts it second only to Hurricane Andrew, which in August 1992 claimed the lives of 41 people, left 300,000 homeless, wiped out 102 miles of power lines and cost the industry more than $21bn.

Lloyd's underwriters were continuing to talk down the hit on the London market with Amlin today shrugging aside concern about Charley in a trading note that forecast increased profits from its 2001 syndicate.

The group, which writes catastrophe loss reinsurance and commercial properties in the US, added that current trading remained good with 'rates and conditions remaining relatively robust'.

But with experts forecasting this year's hurricane season could be the worst on record - with a 30% increase in the number of storms - Lloyd's underwriters will be nervous in the run-up to December.

A third of the global insured loss is now believed to fall in the London market and two more storms, Danielle and Earl, are already whipping up over the Atlantic.