Hurricanes Cost Munich Re 650 Million

German reinsurance giant Munich Re said Wednesday it expected damage claims from Hurricanes Katrina and Rita to knock around 650 million euros ($780 million) off its bottom-line earnings this year. Hurricane Katrina alone, which devastated large areas in the south of the United States in August, was expected to burden Munich Re's after-tax profit by around 500 million euros and as much as 1.1 billion euros before tax, the company said in a statement. Hurricane Rita was expected to result in a net loss burden of 150 million euros for the world's largest reinsurer and a burden of 230 million euros before tax. "As the full extent of the devastation caused by Hurricane Katrina has gradually emerged, natural catastrophe risk management specialists and other companies have revised their loss estimates upwards," Munich Re said. All in all, the two hurricanes were estimated to have lead to total insured market losses of up to $40 billion, Munich Re calculated. With regard to the group's own earnings targets for the current year, Munich Re said it remained optimistic that it would still be able to achieve its target of net return on equity of 12 percent in 2005.