Modelers Now Project A Lower Frances Loss

"When Frances was downgraded to a Category 2 it was a sigh of relief for the industry," commented Loretta Worters, vice president of communications for the Insurance Information Institute in New York.

Ms. Worters said as a result there will not be "any effect at all" on rates in the property-casualty sector. It would have been a different story, she noted, "if this had been a $50 billion storm."

For residents the storm's impact was nothing they could relax about. Fox news reported two deaths attributed to the hurricane. Two million residents were without power, many mobile homes were totaled, and flood and roof damage was widespread.

Frank Lavelle, principal engineer in the Raleigh, N.C. office of Applied Research Associates, said the modeling group would put its insured loss estimate in the $2 billion to $3 billion range."

He said the firm estimated the insured losses would be 85 percent residential.

Kyle Beatty, a meteorologist with Risk Management Solutions of Newark, Cal, said the firm's revised loss estimate for covered property damage was "between $3 billion and $6 billion." He had no immediate breakdown as to what percentage of the damage would be commercial and residential.

Compared with Hurricane Charley, which hit Florida Aug. 13, Frances insured exposure was much broader with a wind field the size of Texas.

However, Mr. Beatty explained that anticipated losses were lower than Charley's $6.8 billion because of lower wind intensities.

Charley at landfall was a Category 4 with sustained winds up to 145 mph compared with Frances, which came ashore with maximum sustained winds of 105 mph.

He said Frances' effect on the Florida Panhandle should be weaker. As it moved toward that area he compared it to the second landfall made by Hurricane Charley.

Alan Levin chairman of the insurance and reinsurance practice for Edwards & Angell law firm in Boston noted that in the wake of earlier hurricanes insurers had limited their aggregations of business within the same zip codes.

"Insurers will ride this one out easily," he predicted. Mr. Levin added that he expected no impact on rates and noted that there had been "a fair amount of reinsurance cover available for these kinds of catastrophes.

Mr. Levin said his sources indicated considerable damage from flooding and looting and "a lot of boat damage."

AIR Worldwide in Boston said Frances' insured loss "will fall within a very similar range" to Charley's $6.8 billion. It put the range between $5 billion and $10 billion.