Updated: 5:45 p.m. ET

(Bloomberg) -- Irma swept over islands in the Caribbean andbarreled toward Puerto Rico with Florida in its sights as the Category 5hurricane threatens to become the most expensive storm in U.S.history.

The threat of a strike in Florida over the weekend and earlynext week has increased, the U.S. National Hurricane Center said. Hurricane watchescould be issued for parts of the Florida Keys and the Floridapeninsula on Thursday. Barclays Plc has estimated insuredlosses in a worst-case scenario from the storm at $130 billion.

'Significant threat'

“The chances for this missing the U.S. are going way down,” saidRick Knabb, hurricane expert with the Weather Channel in Atlantaand until last year the director of the National Hurricane Center.“This is a very significant threat to Florida and the southeastU.S.”

Reinsurance companies may take more of the hit than primaryinsurers, which have reduced their exposure to Florida in recentyears, analysts say. Stocks across the sector are expected to facecontinued volatility until there’s more clarity around the storm’spath and damage.

Irma is 340 miles across and expected to grow

Irma spans 370 miles across, and would cover the state of New York,and is expected to grow, said Jeff Masters, co-founder of WeatherUnderground in Ann Arbor, Michigan.

By late Wednesday, Irma will have generated more energy than theentire 2013 Atlantic hurricane season, said Phil Klotzbach, a stormresearcher at Colorado State University.

Destructive winds

The U.S. EnvironmentalProtection Agency said dangerous winds could cause poweroutages complicating the ability to pump water throughdrinking and waste water systems, especially in Puerto Rico.

Irma comes less than two weeks after Hurricane Harvey smashed ashore inTexas, knocking offline almost a quarter of U.S. oilrefining capacity and causing widespread power outages andflooding. Models show Irma veering away from gas and oil platformsoff the coast of Texas and Louisiana, sparing Houston moredevastation.

Related: Hurricane deductibles: How much do homeownersknow?

Irma’s top winds were holding at 185 miles (300 kilometers) anhour as of 5 p.m. New York time, making the system a Category 5,the highest measure on the five-step Saffir Simpson scale. It wasabout 55 miles east north east of San Juan, Puerto Rico. Irma couldbe off the Georgia coast as a major hurricane Monday.

Mandatory evacuations

In the U.S., mandatory evacuations were issued for the Florida Keysand Governor Rick Scott said he expected additional evacuationorders. President Donald Trump said in a Twitter post that he is“watching hurricane closely” and his team is already in thestate.

A direct strike on Miami at Category 4 strength could lead toinsured losses of $125 billion to $130 billion, Jay Gelb, ananalyst at Barclays, wrote in a note Tuesday. Uninsured losseswould add to that.

Related: How the insurance industry prepares forhurricanes

Losses from Katrina, both insured and uninsured, reached $160billion in 2017 dollars after it slammed into New Orleans in2005, according to the U.S. National Centersfor Environmental Information.

Once past Florida, the misery won’t be over for the U.S. becausethe storm could run up the East Coast or drive deep into thecontinent, bringing flooding rains, said Knabb.

Only three Category 5 hurricanes have hit the contiguous 48 U.S.states, according to Weather Underground: the Labor Day Hurricaneof 1935 that devastated the Florida Keys, Hurricane Camille in 1969and Hurricane Andrew that cut across Florida in1992.

In other storm news

Jose, further east than Irma over the Atlantic, became a hurricane,while Katia also reached that strength in the Gulf of Mexico.Orange juice futures fell after gaining on Tuesday as the stormthreatened the largest supplier after Brazil. Cotton alsoretreated.

Irma could cut power to about 2 million customers in Florida.NextEra Energy said it’s ready to shut down two nuclear powerplants in Florida — Turkey Point and St. Lucie — that maybe in the storm path "long before" the onset of hurricane forcewinds.

Related: Are insurers prepared for Hurricane AndrewII?

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.