Catastrophe modelers say Tropical Storm Hanna should not be a significant insurance loss event for the industry as attention turns to Hurricane Ike that is predicted to hit the U.S. Gulf Coast by this weekend.

From an insurance loss standpoint, Steve E. Smith, president of Property Solutions, Carvill ReAdvisory, a reinsurance brokerage, in Chicago, told National Underwriter that "I would be shocked if it turned out to be significant. I do not see any major impact from this one."

AIR Worldwide in Boston said that insured losses resulting from the storm were expected to be insignificant.

According to Guy Carpenter's CAT-i report, Tropical Storm Hanna hit the border between North Carolina and South Carolina early Saturday morning with sustained winds of around 60 mph. It quickly moved up the Eastern seaboard over the weekend, causing isolated flooding.

Mr. Smith said that while the forecast track was correct, the speed of the storm, moving at more than 25 mph along the coast, kept it from dumping large amounts of rain similar to Tropical Storm Fay, which began in the middle of August and lingered over Florida for days.

Neena Saith, catastrophe response manager with catastrophe modeler Risk Managment Solutions told National Underwriter that Hanna was expected to be an insignificant insurance loss in North America, adding that most of the damage was in Haiti where there is little insurance penetration.

With Tropical Storm Josephine dissipating Saturday morning, all attention has turned to Hurricane Ike, which reached Category 4 status on the Saffir-Simpson Scale at one point on Saturday with sustained winds of 135 mph, according to the National Weather Service.

The storm, following a Sunday arrival, rampaged through Cuba today after taking hundreds of lives in Haiti, which has still not recovered from Hanna. However, the Turks and Caicos Islands took the worst blow from Ike with Category 4 winds. It is reported the storm caused significant damage on the islands.

Ike hit Cuba with sustained winds near 125 mph, a Category 3 storm, and continued over the island nation as a Category 2 storm with winds over 100 mph. Ike is expected to exit into the Gulf of Mexico late tomorrow and build strength there, aiming for the Texas and Louisiana coastline where it could hit sometime Saturday.

"While the passage over Cuba will likely weaken Ike considerably, it could re-strengthen when it reaches the Gulf," noted Mr. Smith in a statement. "Next week could see Ike as a major hurricane again threatening the U.S. Gulf Coast."

Peter Dailey, director of atmospheric science at AIR Worldwide, noted that while the National Weather Service is tracking the center of the storm to hit somewhere around Galveston, Texas, other models have the storm moving further south into Mexico, or north over New Orleans.

He said there is also disagreement over the strength of the storm as it approaches landfall, in part because the warm loop of current in the Gulf is not as warm as it was when Katrina and Rita were active in 2005. He cautioned that there could be "additional intensification just before landfall."

Insurers have begun reporting anticipated losses from late August's Hurricane Gustav which swept into Louisiana and three neighboring Southern states.

In a statement, Wilhelm Zeller, chief executive officer of Hannover Re, said the company expected a net loss of less than EUR100 million ($141 million) from the storm, which modelers are forecasting could cost the insurance industry anywhere from $1.5 billion to $10 billion.

The company budgeted EUR400 million ($564 million) for catastrophes this year. Mr. Zeller said Gustav's "burden of losses still puts us well within our catastrophe loss budget."

The National Security Group Inc., based in Elba, Ala., said today that it expects its insured losses to fall in the range of $3.3 million and $6.7 million. The company's net losses and associated claims settlement costs are expect to range from $3.3 million to $4.5 million. The company retains the first $3.5 million before reinsurance kicks in.

The company said Gustav "is not expected to have a material impact" on the company's financial condition but would have a material impact on this year's results.

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