Hurricane Katrina is the costliest disaster ever, with the worldwide insurance industry facing claims reaching as much as $50 billion (£27 billion), the chief executive of the Lloyd's underwriter Brit Insurance warned yesterday.
"Be in no doubt this is the largest insured loss that has ever occurred," said Dane Douetil. "The trouble is we have no idea how big it will be."
The ultimate insured loss is likely to be far more than the present public estimates, he added.
"It would be more prudent to work on an industry loss of nearer $50 billion than it would $35 billion."
But one senior executive at Lloyd's played down talk of such a big industry loss.
"So far, Dane is the only one who has said that," said Rolf Tolle, the insurance market's franchise performance director.
At the moment, the industry's claims are likely to come in at the top end of the current loss range, at around $30-35 billion, a Fitch Ratings analyst Chris Waterman said.
At that level, the earnings of re-insurers, who are expected to take the brunt of the claims, will be badly hit, but their capital bases should not be impaired, Mr Waterman said.
Mr Douetil highlighted the complex nature of the claims arising from the New Orleans disaster.
While Brit insures buildings in the American Deep South against hurricanes and wind-driven floods, its policies do not cover flooding arising from breaches of levees like those in New Orleans.
" You have buildings standing in water for what could be up to 80 days, which is the time period they are thinking of before they can get the flood water out," Mr Douetil said. "What you're now talking about is constructive write-off for virtually all the buildings."
Pollution caused by chemicals and other substances that have been washed out of factories by the floodwater may also cost a lot of money to clean up. Brit said it was too early to put a figure on its own claims from the hurricane.
It confidently raised its interim dividend by 50 per cent to 3p after reporting half-year profits 60 per cent higher at£112 million.
Another Lloyd's underwriter, Wellington Underwriting, said it expects claims of about $75 million, adding that it expects the impact of the resulting increase in premium rates to be much greater.
Wellington raised its interim dividend by 40 per cent to 1.4p on the back of half-year profits 78 per cent ahead at £57.2 million.
Royal & Sun Alliance said it expects claims of about £25 million. Goshawk Insurance put its likely claims in the claims $25-30 million bracket.