June 14, 2013 / 7:27 AM / 5 years ago

UPDATE 2-Munich Re, Allianz face millions in flood damage claims

* Allianz sees net hit of 350 mln eur for floods

* Analyst sees Munich Re hit at 250-350 mln eur

* Munich Re says too early to predict flood loss

* Allianz shares up 0.8 pct, European sector index up 0.3 pct (Adds analyst forecast for Munich Re hit, GDV)

By Jonathan Gould

FRANKFURT, June 14 (Reuters) - Reinsurer Munich Re is likely to face damage claims of 250-350 million euros ($333-466 million) from flooding in central Europe, a bank analyst predicted on Friday, after Allianz pencilled in its own net hit at 350 million.

Credit rating agency Fitch has forecast damage from the floods - the worst in the region since 2002 - could reach 12 billion euros in Germany alone, of which insurers could cover up to 3 billion.

Hundreds of thousands of people in Germany, the Czech Republic and Slovakia have been evacuated from their homes this month as flood waters have swept through countryside and cities, causing factories to halt production.

“We estimate 250-350 million (euros) for the floods,” JP Morgan analyst Michael Huttner said in a note to clients about Munich Re’s exposure, noting the company paid claims of 400 million euros in 2002.

Huttner said Munich Re, the world’s largest reinsurer, was still on track to reach JP Morgan’s forecast for net profit this year of 3.5 billion euros.

Munich Re’s own guidance is for net profit of close to 3 billion euros in 2013, and the average forecast of analyst forecasts is in line with that figure, according to Thomson Reuters data.

Munich Re said it was still too early to provide an estimate for losses as flood waters in some regions had yet to subside, and that it could be days or weeks before it has a figure.

Earlier on Friday, Europe’s biggest insurer, Allianz, said it expected to pay out more than 500 million euros to its policy holders for the floods, but around 150 million of the cost would be passed on to reinsurers, who help shoulder the burden of big losses in exchange for part of the premium.

JP Morgan’s forecast for Allianz’s hit, made on Monday, was accurate.

Allianz’s estimate for the net loss is less than half of the 710 million euros it paid out for flood claims in the same region in 2002.

Yet a number of individual insurers and Germany’s insurance trade association GDV have said they expect heavier losses this time around.

Germany will set up an 8 billion euro relief fund for the affected areas in southern and eastern Germany, sources in Germany’s centre-right coalition told Reuters on Wednesday.

$1 = 0.7519 euros Reporting by Jonathan Gould; Editing by Christoph Steitz and Mark Potter

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