As the Northeast hunkers down in the face of Hurricane Sandy, weather service forecasts say that its impact could be worse than last year's Hurricane Irene–but one analyst says that the storm may not be enough to turn the market sharply.

Meyer Shields with Stifel Nicolaus points out that last year's insurance industry loss from Hurricane Irene amounted to $4.3 billion. While Sandy has the potential of being another significant loss event, he believes the industry can “easily” absorb a $5 billion insured loss.

However, Shields adds in a financial note that that such a loss “is unlikely to significantly accelerate personal- and commercial-lines rate increases.” He further notes that the insurers that will be most affected by the storm would be Allstate, Chubb, Hanover and Travelers.

Hurricane Irene is ranked fourth in insurance losses to the National Flood Insurance program with a payout of more than $1.27 billion. In terms of overall insured losses, the Insurance Information Institute ranks Irene in 10^th place.

Hurricane Katrina remains the most expensive hurricane insured loss event, at more than $46.5 billion in today's dollars.

Weather experts note that while Irene was a potent Category 1 storm, it moved through the New York area quickly, leaving its greatest impact on upstate New York and New England.

Sandy is expected to become an extra-tropical storm, mixing with a cold front coming in from the West. Some weakening is expected, noted EQECAT. However, the storm is massive, tropical force winds extending out more than 500 miles from the center.

The storm is expected to linger over the region for as long as 36 hours. The worst is expected to be Monday night into Tuesday with heavy rains and hurricane strength wind gusts expected.

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Super Storm Sandy Costly, but May Not Change Rates

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