FRANKFURT (Bloomberg) ? Munich Re, the world?s biggest reinsurer, said its claims from two hurricanes that hit the US in the past month may total $1.6 billion after it almost tripled an estimate of losses from Katrina.

The company?s net costs from the two hurricanes may amount to almost 650 million euros after tax, Munich Re said in a statement yesterday. The company said it still expects to meet a goal for a 12 percent return on equity this year, as long as the purchase of HVB Group by UniCredito Italiano SpA is completed in 2005.

Katrina forced reinsurers such as Swiss Reinsurance Co., the world?s No. 2, and Hannover Re to scale back earnings forecasts after it battered the Gulf Coast on August 29, crippling New Orleans and leaving more than 1,000 people dead. Hurricane Rita hit Texas and western Louisiana on September 24, flooding towns including Port Arthur and Lake Charles. Munich Re said today that ?substantially higher prices? for reinsurance will be necessary after the storms.

?The hurricanes are an extraordinary burden, but next year reinsurance prices will be higher because of them, and that?s very positive,? said Stephan Kalb, an analyst with Sal Oppenheim in Frankfurt who has a ?strong buy? rating on the shares.

Shares of Munich Re rose 1.56 euros, or 1.7 percent, to 94.68 euros last night, valuing the company at 21.7 billion euros. The stock is up 4.7 percent this year, compared with a 12 percent gain in the Bloomberg Europe 500 Insurance Index.

Reinsurers take on a portion of the risks insurers assume for clients, in exchange for premium payments.

Insurers and reinsurers have been tallying losses from the storms and in some cases raising initial estimates. Munich Re today increased its Katrina claims forecast to 1.1 billion euros from 400 million euros. Converium Holding AG, a Swiss reinsurer, doubled its damages estimate to $40 million.

Brit Insurance Holdings Plc, a Lloyd?s of London insurer, predicted its total losses related to the hurricanes will be about ?145 million ($257 million). Nick Marsh, Chief Executive Officer of Lloyd?s insurer Atrium Underwriting Plc, said insurance premium rates in the US Gulf may quadruple.

?We are seeing a dramatic change in energy rates, probably across the board, though particularly for the Gulf,? March said yesterday.

Insurers are already raising rates for commercial property, energy and marine coverage in the aftermath of the storms, Martin Sullivan, chief executive officer of American International Group Inc., said. AIG, which is the world?s biggest insurer, expects Katrina to cost the company about $1.1 billion.

Munich Re currently estimates total insured damages from Katrina at as much as $30 billion, though the company said higher losses can?t be ruled out. If claims rise to $60 billion, Munich Re?s total costs from the hurricane will increase to 1.3 billion euros, or 650 million euros after tax, the reinsurer said.

?There are still significant uncertainties regarding coverage issues and thus also about the actual loss burdens facing the insurance industry,? Munich Re said in the statement.

The company estimates total insured losses from Rita will amount to between $5 billion and $10 billion. Munich Re said its own damages related to that storm will be about 230 million euros, and 150 million euros after tax.

Standard & Poor?s yesterday lowered the outlook for the global reinsurance industry to negative from stable, implying that it will probably lower more ratings than it will raise in the remainder of 2005, because of ?the most expensive loss event in the industry?s history, Hurricane Katrina?.

Katrina?s insured damages may reach $60 billion, according to storm modeler Risk Management Solutions of Newark, California.

The sale of HVB, Germany?s second-largest bank by market value, stands to benefit Munich Re because the reinsurer is HVB?s biggest shareholder, with an 18.3 percent stake. HVB investors have until October 10 to exchange each share for five of UniCredito.

?If we decide to exchange shares, then we would realise a disposal gain on the basis of current stock market prices,? Munich Re spokesman Florian Woest said, declining to elaborate.

HVB shares have risen 41 percent so far this year, valuing Munich Re?s stake at about 3.2 billion euros.

The takeover of HVB will proceed as planned in spite of criticism from the bank?s supervisory board, Handelsblatt reported today, citing HVB Chief Executive Dieter Rampl and UniCredito CEO Alessandro Profumo.