Local insurance companies have seen a surge in business as the full force of Hurricane Fabian yesterday moved closer to Bermuda and threatened to make a direct hit on the Island.

The two largest insurance companies, Argus Insurance and BF&M, yesterday halted writing any new marine business at mid-day as the threat of the storm was broadcast across Bermuda.

Telephones were ringing off the hook as customers scrambled to up their cover in case of a direct hit - and to renew lapsed policies in time for the storm's possible landing.

BF&M saw the number of customers going on-line to buy insurance or get quotes for policies go up four-fold.

But at the close of play yesterday, none of the insurance companies that spoke to The Royal Gazette had yet stopped writing contents and property business. As storms come closer to hitting land most companies traditionally stop writing policies.

"We have a responsibility to our shareholders and our reinsurers to make decisions to stop writing new policies (to minimise losses)," said Glen Gibbons, vice president, sales and marketing for BF&M.

Companies were still making good on renewals - where old policies are renewed - and doing a roaring business with upping the value of contents insurance as people looked again at the value of their property and the increased risk of a big hit.

Gerald Simons, chief executive officer of Argus Insurance, said: "What we have seen is people paying premiums that were overdue, and we have been seeing people increase the sums insured on policies. This is mainly home owners and some marine insurance, although immediately before hurricanes we stop selling marine insurance.

"We stopped selling marine insurance already but are still selling contents and building but we will review this in the morning and will at some point stop writing business."

Mr. Gibbons said that both web traffic and in-house business had been a lot busier than BF&M would normally expect to see, adding the focus had been on home and marine insurance during the day yesterday.

He said: "A lot of people have come in to ask questions about their policies as well as renew and sign up for new policies."

Larry Osborne, vice president, property casualty at Argus said: "We have had quite a few people coming in, and our staff were saying they were rushed off their feet.

"We lost our phone connection for an hour this morning, which added to the problems. It has been crazy, and everyone has been working hard today. The fear is that we might be working harder on Saturday and Sunday."

Mr. Osborne said that the company had land lines, cell phones, Internet and marine radios if necessary in case the storm hit.

"We just have to see what is left," he said. "If the communications go down for a while they are usually up and running quickly," he added. "We are just hoping it will be downgraded to category two or may go east of us.

"It looks pretty big at the moment, the biggest one we have had for a while coming straight at us.

"We have had a few (hits) in recent memory, Felix in 1995 and Karen in 2000. Now we are expecting a fairly big one, and we are as prepared as we can be, but we just don't know what will happen."

He added that residents normally acted very responsibly and most took good precautions when a storm was coming near.

Christopher Moroney, chief financial officer of Freinsenbruch-Meyer, said yesterday they had not seen a huge surge in business as the storm approached. "It has been relatively calm," he said.