ZURICH, Switzerland (AP) — Hurricane Gustav will cost the global insurance industry up to US$8 billion, Swiss Reinsurance Co. said yesterday.

Insured damages from natural disasters through the end of August were 20 percent higher than in the same period last year, the company said before an annual industry meeting in Monaco this week.

It said the damage from Gustav would be between $4 billion and $8 billion.

The Zurich-based reinsurance company, which acts as a back-up to smaller insurers by buying some of their risk in return for a premium, also expressed concern about the possibility of high inflation.

Insurance companies could find themselves unable to pay for damages if inflation stays high, Swiss Re said.