EUROPE (Bloomberg) — Peter Hoeppe, the chief scientist at Munich Re, saw nature's destructive power up close.He found himself in hip-deep water during the tsunami that left 229,000 people dead or missing in December 2004.

"It felt life-threatening," said Hoeppe, who was on vacation in the Maldives when an underwater earthquake off Sumatra sent waves as high as 30 metres (100 feet) crashing into coastlines from southeast Asia to eastern Africa.

A week later, Hoeppe took over the Geo Risks department at Munich Re. He and his team of 30 geophysicists, geographers and weather experts pore through research and simulate disasters to make sure the world's second-largest reinsurer is ready for the costliest catastrophes — from an earthquake in Tokyo to a Category 5 hurricane striking Houston.

Hoeppe predicts this year's Atlantic hurricane season, which began last week, will be worse than usual, with insured damages surpassing the $20 billion average of the last seven years and far exceeding last year's $250 million.

His models show a high probability that at least one storm will hit land and cause major insured losses.

Scientists like Hoeppe, who has doctorates in meteorology and human biology from Munich's Ludwig-Maximilians-University, have taken on greater prominence since Hurricane Katrina. The storm battered the U.S. Gulf Coast in August 2005, flooding New Orleans and causing record insured losses of $40.7 billion.

"The current warm phase of sea-surface temperatures, which started in 1995, is still the most important driver behind higher hurricane intensity and frequency," Hoeppe said in an interview last week at Munich Re's headquarters. "We will remain in this phase for at least another 10 years."

His research guides Munich Re's management board and underwriters in deciding how much risk to take and at what price. "We need to know what burdens we would have to bear if the worst came to the worst," said Heike Trilovszky, head of Munich Re's underwriting department.

Munich Re almost doubled rates for property and casualty reinsurance in hurricane-affected areas after Katrina. Prices for coverage of oil rigs in the Gulf of Mexico jumped as much as 400 percent.

The company said it further raised rates for storm-prone regions this January.

The 127-year-old Munich-based company and larger rival Swiss Reinsurance, based in Zurich, help insurers such as American International Group and Allstate shoulder risks for clients.

"The trend clearly points toward more frequent and more expensive natural disasters," said Ernst Konrad, the Munich- based head of equities at Bayern-Invest, which manages about $35 billion and owns shares of Munich Re and Swiss Re. "That's good for reinsurers as it will drive demand and prices."

Munich Re's net income rose for the past three years, reaching a record 3.4 billion euros ($4.6 billion) in 2006. Shares of Munich Re rose 32 percent in the past year, topping the 24 percent gain of the Bloomberg Europe 500 Insurance Index.

Hoeppe expects human-driven global warming to trigger more severe natural disasters.

This winter he predicted a major storm in Europe after noting that warmer-than-usual weather left less snow cover in the region.

In mid-January, winter storm Kyrill swept through Britain, France and Germany, resulting in more than 40 deaths.

Climate models indicate winter storms in Europe will become more intense and less frequent, Hoeppe said.

He reckons the 2007 hurricane season will be worse than usual because of the likely absence of El Nino, a warming of the Pacific Ocean that occurs every few years, and Saharan sandstorms that diminished the impact of last year's storms.

Hoeppe and most of his team work from the reinsurer's five- story complex in the Schwabing district of Munich, where a glass- encased mock-tornado machine whips up a cloud of mist to greet visitors.

They analyze loss reports connected with major catastrophes since 1975, and have archives stretching back to the eruption of Mount Vesuvius in 79 AD.