Insurers could be hit with claims totalling more than $500 million from this week's UK floods, according to initial estimates by catastrophe modelling specialists Risk Management Solutions.

The severe and widespread flooding, which has hit northeast England the hardest, already appears to be worse than the 1998 UK floods, which damaged around 3,000 properties and resulted in $190m in today's value of insured loss.

Currently, the event is not as severe as the autumn 2000 floods which affected over 10,000 properties and caused $925m in today's value of insured loss. However, the floods are ongoing and further rainfall is expected over the weekend, which may worsen the situation.

Sheffield is among the hardest hit areas, mainly due to the River Don bursting its banks. Flooding has been reported in some of the major industrial and commercial riverside locations, causing substantial business interruption losses. Sheffield has undergone significant regeneration in recent years, and a lot of prime real estate has been built in the flood plain by the river.

"Two factors that will benefit insurers are that property prices tend to be lower in the north of England compared to the south, and buildings dry out quicker in the summer," said Dr Claire Souch, senior director of model management at RMS.

The rainfall situation, caused by a stationary east coast depression which draws moisture from the North Sea, is similar to the Norwich flood of 1912.

It has been described as a "one in a 100-year event" and historical records indicate that this was the first time that the River Don has burst its banks with such dramatic consequences for 150 years.

The extent of further insured losses will depend on whether the rain forecasted in the coming days falls directly over the areas already hit.

RMS said it would continue to monitor the flooding situation and is sending reconnaissance teams to determine the extent and severity of property damage through detailed surveys, similar to past event surveys.