Insurance companies are likely to come under political pressure to pay claims arising from Hurricane Katrina early and without dispute, according to Robert Cooney, president and chief executive officer of Bermuda-based Max Re.

Speaking at a client conference organised by Aon Captive Services Group, Cooney told delegates that there will be pressure not only to make payments quickly, but also to avoid challenging the validity of claims.

Estimating that the final insured loss will be significantly more than the $25-$30bn that has been speculated, he said that there would be knock-on effects across the industry. “This will impact the property market and also coastal areas exposed to catastrophe, not just in the US but in Europe too,” he said.

Cooney told the conference that the Katrina costs will add pressure to an already weakened reinsurance industry. “The industry isn't as healthy as you would expect, given that we have had a fairly hard pricing cycle in the past four years,” he said.

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