NU Online News Service, March 4, 1:00 p.m.EST

AIR Worldwide catastrophe risk modeling firm said the latestpicture of earthquake damage in Chile's hardest-hit regions revealsthat business interruption will be significantly extended.

The Boston-based company has estimated that the insured lossfrom the quake will exceed $2 billion.

With a fuller understanding of the scope of destruction, AIRsaid officials have reported that as much as 80 percent to 90percent of some towns in the region by the quake's epicenter, thecentral coast, have been destroyed in the quake.

Damage to infrastructure, including ports there, will extend theinterruption of business operations significantly AIR reported.

Up to one fifth of Chile's copper-mining capacity was haltedafter the quake, but has since resumed.

"According to the data we have collected during the past fewyears, in Chile today, masonry (reinforced, confined, orunreinforced) is the predominant construction type, accounting forroughly 60 percent of residential buildings and more than 40percent of commercial buildings," explained Guillermo Franco, AIRsenior research engineer.

Wood accounts for about 20 percent of the residential buildingstock, concrete, which is typically used for mid- to high-riseapartment buildings, accounts for approximately 15 percent, Mr.Franco added. According to the research engineer, about one thirdof commercial buildings use reinforced concrete, while steelconstruction accounts for about 15 percent. Industrial buildingsare typically erected using steel or light metal.

Chile's capital of Santiago, 200 miles from the epicenter, hasfared much better. Thousands of modern mid-rise and high-risebuildings in the capital withstood the earthquake withoutstructural damage, thanks to a strict building code, AIR noted.

However, the company reported there are several instances ofmid-rise apartment buildings that, while still standing, havesuffered structural damage sufficiently severe to require theirdemolition.

"Chile's strong building code specifies the earthquake loadsthat need to be resisted," said Mr. Franco. While the building codeapplies nationally, construction practices can vary significantlyfrom company to company and from region to region, he noted.

At the same time Lancashire Holdings Limited in Bermud said itbelieves it is premature to estimate the extent of any potentialcompany losses likely to be incurred from the earthquake and itsaftershocks or the resulting impact on first quarter results,reinstatement premiums or market pricing.

Lancashire said it has exposures to risks in Chile in classesincluding onshore energy, property retrocession; property directand facultative; and property catastrophe.