NU Online News Service, Aug. 25, 3:06 p.m.EST

Hurricane Irene is expected to be a multi-billion dollar eventfor the insurance industry, says Robert Hartwig, president of theInsurance Information Institute.

The storm, a Category 3 hurricane with sustained winds of 115mph, is battering the Bahamas and will start heading north—well offthe east coast of Florida on Friday—on its way to the southerncoast of North Carolina.

After passing over North Carolina, Hurricane Irene on Sundaymorning is expected to remain a hurricane to the south of NewJersey alongside Virginia, Maryland and Delaware.

Then Irene is projected to head through New Jersey to the NewYork metro area and New England through Sunday.

Hartwig was interviewed early this morning on CNBC.

“It looks like HurricaneIrene, at this point, is going to be a significant hit, likely amultibillion dollar storm that is a large event, certainly for theEast Coast, but well within the planning scenario for [property andcasualty] insurers and re-insurers,” Hartwig says.

Alex Sosnowski, expert senior meteorologist at AccuWeather.com says Hurricane Irene could be among the “worsthurricane impacts in 50 years along the northern part of theAtlantic Seaboard.”

He says, “The impact on lives, property, commerce and travelwill be serious.”

Sosnowski says Irene will weaken once it reenters water afterhitting North Carolina but “that will not happen fast enough toprevent serious problems from wind, rain and ocean water.”

Hurricane Jeanne in 2004 affected many of the same states andcaused $4.15 billion in insured losses. It ranks as the tenthcostliest storm in the United States.

Hurricane Floyd in 1999 came up the East Coast and caused $3.5billion in losses.

State-run insurers may feel a significant brunt of the insuredlosses, Hartwig says. The residual market in Massachusetts, forinstance, could see the “largest losses they have ever seen inhistory.” These funds often make up for shortfalls by assessingother policyholders.

“They'll be paying on that for years,” Hartwig says.

New York's residual insurer has actually seen a decrease inpolicies since 1990 (about 54,255 in 2010 from 73,805) but exposureto loss has more than doubled from $45.6 billion in 1990 to $13.9billion in 2009.

Only Florida exceeds New York's total $2.4 trillion in insuredvalue of coastal properties.

In 1938 a hurricane known as the “Long Island Express” madelandfall as a Category 3 storm. An analysis by catastrophe modelerAIR Worldwide concludes that the storm would have caused $38billion in insurance damages if it occurred today.