* Losses pale against Irene, Katrina, other storms
* Slow-moving storm
* Fuller estimates due in days ahead
By Ben Berkowitz
Aug 29 Hurricane Isaac has caused up to $1
billion in economic losses for offshore energy properties and up
to $1.5 billion in insured losses onshore in Louisiana and
neighboring states, disaster modeler Eqecat said on Wednesday.
While the estimates are early and likely to rise, they
suggest that Isaac, now downgraded to a tropical storm, will
ultimately be a much less damaging storm than 2005's Hurricane
Katrina, a larger and more powerful cyclone that hit the same
A fuller loss picture was expected later on Wednesday and
into early Thursday as Isaac passes over New Orleans a nd Baton
Rouge, Louisiana. Scientists warned there was still plenty of
room for more damage to develop.
"The storm is not even over, the storm has not moved away
from Louisiana yet, we haven't seen all it's going to dish up,"
said Michael Kistler, a director at RMS, another of the major
disaster modeling firms.
Shares in major insurers were little moved in midday
trading, as analysts and ratings agencies said it appeared Isaac
would have little to no impact on the industry.
Eqecat, like RMS a modeler whose software is used by the
insurance industry, said the offshore losses were in the range
of $500 million to $1 billion. Those are economic losses,
however, which are as a rule higher than insured losses. The
insured figure is due later on Wednesday.
Onshore, where insured estimates are already available,
losses are in a range of $500 million to $1.5 billion, the firm
said. That estimate covers property losses and business
interruption policies as well as energy production.
If the early trends hold, Isaac would not crack the top-10
list of worst hurricanes by inflation-adjusted losses. Last
year's Hurricane Irene, which is 10th on that list, caused about
$4.3 billion in losses.
Eqecat peer AIR Worldwide is expected to release its own
loss estimate in the next day or so. The two firms often differ
in their estimates.
"Because it slowed down and kind of stalled, the winds and
the rain impacting New Orleans are going to last a lot longer
than they would have had the storm just progressed inland," AIR
principal scientist Tim Doggett said of Isaac in an interview.
"That's going to impact our losses that we'll see."
Some coastal areas have seen more than 10 feet (3 metres) of
storm surge from Isaac -- the water that a tropical cyclone
pushes forward as it comes on land -- according to the latest
National Hurricane Center estimates. Storm surge caused more
than $21 billion in losses when Katrina hit seven years ago to
Even well inland, as far north as Indiana by some
projections, heavy rains are likely in coming days. The rains
will be too late to save crops that may have experienced $20
billion in insured damage from a punishing drought.
Along the Gulf Coast, the most exposed insurers include
State Farm, Allstate Corp and Southern Farm Bureau on
the residential side, and Travelers, Zurich
and CNA on the commercial side.
After last year's record-breaking losses from severe
tornadoes, those insurers and their peers have had a much
quieter 2012, leaving them better prepared financially for this
year's hurricane season.
A spokeswoman for State Farm, which has more than 21 percent
of all auto and homeowners' policies in Louisiana, Alabama and
Mississippi, said the insurer had teams in place to begin the
claims process but that it was too early for any hard data on
European reinsurers, which would suffer some of the biggest
losses in a major natural disaster, were reacting calmly to
Isaac thus far. Reinsurers Munich Re and Hannover Re
said it was too early to estimate possible damage.
"We are relaxed about it," said one reinsurance source, who
asked not to be named.