Ivan: $2 Billion To $3 Billion Caribbean Losses

Ivan: $2 Billion To $3 Billion Caribbean Losses

By Mark E. Ruquet

NU Online News Service, Sept. 13, 4:25 p.m. EDT?Hurricane Ivan's swath of havoc through the Caribbean so far adds up to between $2 billion and $3 billion in insured losses, according to modeling firm projections.[@@]

Ivan hit the Grand Cayman Islands, a British Crown Colony, yesterday, causing significant damage from winds and flooding with close to Category 5 gusts. Earlier on Saturday it took a damaging swipe at Jamaica.

Jayanta Guin, vice president for research and modeling for AIR Worldwide in Boston, a subsidiary of Jersey City-based Insurance Services Office Inc., said the firm's modeling puts property-casualty insurance losses from Ivan to as much as $3 billion.

Losses in Jamaica could reach $1 billion from a combination of wind and flood damage to the island nation. While Grand Cayman, which took a bigger hit from the storm as it intensified, could cost the industry as much as $2 billion, AIR calculates.

Mr. Guin said there is widespread damage reported in the Grand Cayman from wind damage to roofs and flooding in low lying areas. The figures there are higher, he said, due to a combination of the intensity of the storm, higher property values and, in turn, increased insurance penetration.

The wealthy, three-island chain is noted for its scuba diving and as a major offshore banking center.

Ivan is the most powerful storm to hit the area since Hurricane Gilbert in 1988, said Mr. Guin. In Jamaica alone, the storm cost the industry $700 million, which would translate into about $1.4 billion today, he said. He did not have figures for the Grand Caymans.

Rick Clinton, president of Oakland, Calif.-based Eqecat, a subsidiary of ABSG Consulting in Houston, put the figure for Ivan for the Caribbean at $2 billion, which includes largely property and business interruption losses.

Should Ivan hit the U.S., as forecasters have it on a path to do, the losses could be anywhere between $3 billion to $16 billion in insured losses in the U.S., said Mr. Clinton, cautioning that the figures are based on a wide modeling range.

Should Ivan hit in Florida's Pensacola area, damages could range from $4 billion to $6 billion, but if it tracks closer west to New Orleans, insured losses could be higher, he said.

Forecasters expected to see the storm passing the western tip of Cuba some time today, with hurricane warnings going up along Mexico's Yucatan peninsula as Ivan, now a Category 5 storm, with sustained winds of 160 mph, begins churning into the Gulf of Mexico. Reports say the storm has claimed more than 60 lives so far.

Ivan is expected to reach the U.S. sometime Thursday morning, according to the National Hurricane Center Forecast, with an impact area currently ranging from Louisiana to the Florida panhandle.

A mandatory evacuation order for the Florida Keys was lifted this morning, but a tropical storm watch remains in effect.