Loss estimates from Hurricane Irene, which hit the US east coast last week, range from $US1.5 billion to $US6 billion ($1.4 billion-$5.6 billion), but industry observers say the losses are not significant enough to erode insurer capital.

Catastrophe modeller Eqecat is forecasting US mainland insured losses of $US1.5 billion-$US2.8 billion ($1.4 billion-$2.6 billion), from economic damage in excess of $US10 billion ($9.3 billion). 

It says around 60% of the losses are expected to come from New York, New Jersey and Connecticut, with two-thirds of the losses attributable to personal lines policies, and commercial and industry policies accounting for the remainder.

Fellow cat modeller AIR Worldwide has put the US insured loss at $US3 billion-$US6 billion ($2.8 billion-$5.6 billion), which includes wind and storm surge damage to onshore residential, commercial and industrial properties and their contents, automobiles, additional living expenses and business interruption.

AIR Worldwide says its higher forecast takes into account the disparity between the wind strength reported by the National Hurricane Centre and lower wind strengths recorded by local measuring devices.

“The final range of loss estimates issued by AIR for Hurricane Irene reflects the still-present uncertainty in surface-level wind speeds,” the company says.

Both Eqecat and AIR Worldside’s estimates exclude flood losses ceded to the National Flood Insurance Program (NFIP), which typically covers flood damage from surface water.

Ratings agency AM Best says Irene has “struck a blow to the fiscal strength of the NFIP” which is already more than $US18 billion ($16.8 billion) in debt following the 2005 hurricane season.

Eqecat is now tracking Hurricane Katia, a category two hurricane which is forecast to strengthen in intensity and could make US landfall later this week.