LONDON -- Reinsurance giants Swiss Re and Munich Re estimate they will be hit by losses of $500 million or more each from the earthquake in Chile, while the insurance industry as a whole is likely to face a bill of between $4 billion and $7 billion.

Swiss Re said it will take pre-tax losses of around $500 million from the 27 February earthquake, though it added there are still significant uncertainties around the figure.

It will also take a further $100 million of losses from European winter storm Xynthia, which hit the Continent over the same weekend and did most of its damage in Spain and France.

"In Chile, it is common practice for owners of mortgaged residential property, commercial and industrial property to buy earthquake insurance from local and global private insurance companies," Swiss Re said.

"Accordingly, this latest earthquake will lead to significant insurance claims for property damage and business interruption which are designed to facilitate a swift economic recovery," it added.

Munich Re estimated its combined losses from the two events at $679 million, saying that up to $136 million of the total would be from the storm.

Both insurers estimated the industry-wide bill for the Chile earthquake will be between $4 billion and $7 billion. In addition, Munich Re said the insured market loss for winter storm Xynthia should total between $2 billion and $3.4 billion.

Nomura analyst Kathy Fear said Munich Re will have used up around 60 per cent of its budgeted natural catastrophe losses in these two events and that there is therefore a risk that 2010 will prove to be a more costly year for natural catastrophes.