The company said its preliminary estimate was developed through an analysis of claims reported and anticipated to be reported, the values of properties in the affected areas, damage projections estimated by wind force, and the presence of other perils.

It also includes anticipated costs from demand surge and other factors involving judgment calls.

St. Paul Travelers said the reinsurance recoverable portion of the estimate assumes utilization of the company's corporate catastrophe treaty and recoverability under its property and other physical damage treaties and facultative contracts.

After payment of reinstatement premiums, St. Paul Travelers said it has coverage for one additional occurrence under its corporate catastrophe treaty and continuing protection under most of its other treaties.

The insurer warned that "there can be no assurance that St. Paul Travelers' ultimate costs associated with Hurricane Katrina will not exceed these estimates."

It noted that factors that impact the estimate include the inability of the company and its insureds to access portions of the affected areas, the complexity of factors contributing to the losses, legal and regulatory uncertainties, the preliminary nature of the information available to prepare these estimates, and the potential effects of Hurricane Rita.

"In response to the significant devastation caused by Hurricane Katrina, our primary concern continues to be for all those individuals impacted by Katrina, including our customers, agents and brokers, and employees who have been directly and seriously affected," said Chairman and Chief Executive Officer Jay Fishman.

"We have an expansive team of experts working on the ground and available 24/7 by phone to take action for the many customers that need our immediate help," he added. "Our thoughts are with those who have lost so much and continue to be affected by Katrina's aftermath."