Charley $7.4 Billion Tab, But He's No Andrew

Most said they would not have any solid figures until the end of the week as downed power lines and lack of telephone service has made the claims reporting process problematic in the struck areas.

The I.I.I. figure would make Charley well below the $19 billion in insured losses caused by Andrew 12 years ago, but the improved market conditions brought on by the 1992 event will help the industry weather the storm much better.

"Charley was a much different hurricane than we have been exposed to in the past," said John Eager, senior director of claims services for the Property Casualty Insurers Association of America. "Hurricane Andrew hit a densely populated area and covered a wide swath, while Hurricane Charley was much more compact and the trail of destruction was much narrower."

While wind damage remains high, companies are seeing a much smaller grouping of water damage claims.

"This means that individual losses will not be as high, on average, as they were with Andrew, or Hugo in 1989," Mr. Eager explained.

He also said that PCI members are reporting lighter-than-anticipated commercial losses so far, but damage to the agriculture industry could be significant.

That damage, however, could be mitigated by crop insurance from the U.S. Agriculture Dept.

Industry analysts also believe that higher premiums instituted in the wake of Hurricane Andrew and improved building construction standards will improve the recovery this time around.

"Homes and buildings that implemented improvements in building construction and roofing design weathered storms much better than older structures," Mr. Eager said.

In addition, the establishment of the Florida Hurricane Catastrophe Fund in 1994?specifically set up to provide reinsurance to companies writing residential policies there?should help the industry get through this event with a minimum of pain.

The industry estimated surplus of $353 billion is also roughly two-and-a-half times the size when Andrew hit.