Zurich Financial Services Group said today that it expects claims losses from Hurricanes Gustav and Ike to reach $600 million before tax.

The Zurich, Switzerland-based insurer said the figure is a preliminary estimate that is net of reinsurance recoverables and includes reinsurance reinstatement premiums. The estimate comprises approximately $55 million for Gustav and $545 million for Ike, Zurich said.

Hurricanes Gustav and Ike hit the U.S. Gulf Coast in September, affecting large areas of Texas, Louisiana and parts of the Midwest.

Zurich said the charges would be recorded in its nine-month results due to be released on Nov. 13.

Zurich said that taking the catastrophe costs and the previously announced bond impairments in connection with three defaulted institutions into account, the estimate of the company's surplus remains comfortably above its internal "double-A"-calibrated risk-based capital requirement and at a strong group solvency level (Solvency I).

"The steps we have taken to proactively manage our exposures to natural catastrophes in the U.S. limited our losses to a very manageable level," said Zurich Chief Financial Officer Dieter Wemmer in a statement. "It is also a testament to the strength of our balance sheet that we can absorb these losses and still maintain such a healthy solvency position."

Special Reports /

Zurich Says U.S. Hurricanes Top $600M

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