Damage claims faced by German insurers for hail storms this yearare almost twice the amount expected at 2.7 billion euros, a tradegroup said on Tuesday of a figure which will eat into sectorprofitability.

Reinsurer Munich Re last month estimated the industry-wide hitat 1.5 billion euros, of which its share was 180 million euros,including 160 million from reinsurance.

“Two factors contributed to this immense volume of damage: theunusually large size of the hail stones and the movement of thehail storms through a densely populated area,” GDV (Berlin-basedGerman Insurance Association) said in a statement.

It declined to give an estimate of the breakdown of costsbetween insurers and reinsurers, who take on a portion of insurers'claims in exchange for part of the profit.

While Germany's insurance sector is big enough to absorb thedamage, the hail storm claims will come as an unwelcome hit toprofit in an industry already under pressure from low interestrates, which are choking investment income.

Reinsurer Swiss Re has said it expected the storms to cost itaround $240 million, given an insured market loss of between $2billion and $2.7 billion.

Hannover Re said it expected to face around 15.3 million eurosin claims while insurer Allianz has estimated its share of thedamage at about 200 million euros.

Damage from extreme weather looks set to rise, the GDV said,referring to climate research that pointed to a potential 60percent rise in hail storm losses by the middle of the century.

The latest hail storms led to some 910,000 claims, including450,000 automobile claims worth 900 million euros, the GDVsaid.

The hail losses came after 1.8 billion euros in damage forflooding in June, which led to about 140,000 claims. ($1 = 0.7368euros)