News last week that Hurricane Katrina would cause rating agency downgrades across Lloyd's and the major reinsurers was no surprise.
Though insurers and reinsurers claim their risk modelling systems are now second to none and have predicted these risks, Swiss Re's announcement that its estimates after one week had shifted from $500m to $1.2bn shows that the industry is still in the dark.
I echo Brit chief executive Dane Douetil's prediction that Katrina's final loss is going to be above $50bn. What is scarier still is that we are only really halfway through the season. Another hurricane is heading for Houston and that could cripple this industry.
President Bush has taken full responsibility for the dreadful disaster management that the world witnessed in New Orleans and the Mississippi Delta post-hurricane. If he is ready to spend $200bn to cover his tracks then the US government should share much of the loss.
Lloyd's and the world's reinsurers should begin lobbying the Senate forthwith before the storm clouds lift and we find a corporate wasteland.