Insurers escape the worst of ­Hurricane Irene

Global insurance companies have got off relatively lightly with Hurricane Irene and it is just as well because their earnings this year were already under pressure from other natural disasters, analysts say.

Irene ploughed along the US and Canadian eastern seaboard at the weekend after causing perhaps a billion dollars worth of damage in the Carribean, with at least 40 deaths reported and extensive flooding inland.

“We do not believe that the magnitude of this event is such that it will significantly influence the industry’s creditworthiness,” Standard and Poor’s said in a report yesterday.But “because of the magnitude and the frequency of the catastrophe losses year-to-date, we believe that reinsurers’ 2011 earnings will erode,” the ratings agency said.

S &P put the insurance losses at around $5 billion, in line with French bank Societe Generale’s estimate.

The figure is very significantly lower than the $72.3 billion in damages caused by Hurricane Katrina in 2005 which ripped through New Orleans and left 1,500 people dead.

“The worst is avoided,” Societe Generale said.

“Major losses are likely to come from New York, for business interruption given the hundreds of flights that were cancelled, reduced hotel occupancy rates and disruption to utility companies,” it said. IHS Global Insight noted that if insured property damages reached up to $5 billion, it would suggest total economic losses of up to $15 billion.

“In comparative terms, at $5 billion in total property damage, Irene would not even figure on the top 10 list of the most destructive Atlantic hurricanes,” it noted.