LONDON – Tornadoes that swept through southern U.S. states last month could cost the insurance industry up to $6 billion, risk-modeling agency RMS said on Tuesday.
The tornadoes, which struck Alabama and neighboring states in late April, will cause insured losses of $3.5-$6.0 billion, according to an initial estimate from RMS.
RMS's estimate compared with a projected loss of $3.7-$5.5 billion calculated by rival AIR Worldwide, with Eqecat, another risk-modeling agency, penciling in a loss of $2-$5 billion.
Losses from the tornadoes will add to tens of billions of dollars in insurance claims arising from a string of natural disasters over the first three months of the year, including the earthquake that devastated Japan on March 11.
The Lloyd's of London insurance market said last week it would take a $3.8 billion hit from earthquakes and floods in the first quarter, outstripping the $2.6 billion in natural disaster claims it paid out in the whole of 2010.
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