Ivan: $2 Billion To $3 Billion Caribbean Losses

By Mark E. Ruquet

NU Online News Service, Sept. 13, 4:25 p.m.EDT?Hurricane Ivan's swath of havoc through the Caribbeanso far adds up to between $2 billion and $3 billion in insuredlosses, according to modeling firm projections.[@@]

Ivan hit the Grand Cayman Islands, a British Crown Colony,yesterday, causing significant damage from winds and flooding withclose to Category 5 gusts. Earlier on Saturday it took a damagingswipe at Jamaica.

Jayanta Guin, vice president for research and modeling for AIRWorldwide in Boston, a subsidiary of Jersey City-based InsuranceServices Office Inc., said the firm's modeling putsproperty-casualty insurance losses from Ivan to as much as $3billion.

Losses in Jamaica could reach $1 billion from a combination ofwind and flood damage to the island nation. While Grand Cayman,which took a bigger hit from the storm as it intensified, couldcost the industry as much as $2 billion, AIR calculates.

Mr. Guin said there is widespread damage reported in the GrandCayman from wind damage to roofs and flooding in low lying areas.The figures there are higher, he said, due to a combination of theintensity of the storm, higher property values and, in turn,increased insurance penetration.

The wealthy, three-island chain is noted for its scuba divingand as a major offshore banking center.

Ivan is the most powerful storm to hit the area since HurricaneGilbert in 1988, said Mr. Guin. In Jamaica alone, the storm costthe industry $700 million, which would translate into about $1.4billion today, he said. He did not have figures for the GrandCaymans.

Rick Clinton, president of Oakland, Calif.-based Eqecat, asubsidiary of ABSG Consulting in Houston, put the figure for Ivanfor the Caribbean at $2 billion, which includes largely propertyand business interruption losses.

Should Ivan hit the U.S., as forecasters have it on a path todo, the losses could be anywhere between $3 billion to $16 billionin insured losses in the U.S., said Mr. Clinton, cautioning thatthe figures are based on a wide modeling range.

Should Ivan hit in Florida's Pensacola area, damages could rangefrom $4 billion to $6 billion, but if it tracks closer west to NewOrleans, insured losses could be higher, he said.

Forecasters expected to see the storm passing the western tip ofCuba some time today, with hurricane warnings going up alongMexico's Yucatan peninsula as Ivan, now a Category 5 storm, withsustained winds of 160 mph, begins churning into the Gulf ofMexico. Reports say the storm has claimed more than 60 lives sofar.

Ivan is expected to reach the U.S. sometime Thursday morning,according to the National Hurricane Center Forecast, with an impactarea currently ranging from Louisiana to the Florida panhandle.

A mandatory evacuation order for the Florida Keys was liftedthis morning, but a tropical storm watch remains in effect.