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Irma insured losses may pass $80 billion: modeller

Hurricane Irma will cost insurers $US20-$US65 billion ($25-$81 billion) in the US and Caribbean, according to catastrophe modeller AIR Worldwide.

It says insured losses from Irma’s wind and storm surge in the US range from $US15 billion ($18.6 billion) to $US50 billion ($62.2 billion), and wind and rain-induced flooding in the Caribbean will likely result in losses of $US5-$US15 billion ($6.2-$18.7 billion).

Irma crashed into the Florida Keys on Sunday after pummelling the Caribbean.

The storm has been downgraded to Category 2 but it is still producing very strong wind, according to the US National Hurricane Centre.

All of Florida has been affected by damaging wind and rain.

S&P Global expects wind and storm surge to be the primary cause of losses, rather than flood-related damage, and residential property will be the most affected line.

“As a result, we expect the difference between insured losses and economic losses to be narrower,” it says. “Furthermore, we do not expect the auto line to face a significant exposure to losses because of Irma.”

Fellow ratings agency AM Best says “catastrophic property losses is a very real possibility” in Florida.

“The commercial insurance segment is likely to experience significant claims for both direct property losses and business interruption if Irma’s impact is in line with current forecasts.

“AM Best anticipates that third-quarter and annual earnings for most public commercial-segment companies will be adversely affected by the one-two punch of [hurricanes] Harvey and Irma.”

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