Families, friends and businesses in Bermuda watched Hurricane Dean closely yesterday.

The category three hurricane is racing across the eastern Caribbean and at press time had already claimed three lives.

The National Hurricane Centre predicted that Dean could be upgraded to a category four by today.

Over the weekend Jamaica, the Cayman Islands, Cuba and eventually Cancun, Mexico are expected to feel the impact of the hurricane.

With winds up to 125 miles per hour Dean, the first hurricane of the season, is packing quite a punch.

It has already blown past St. Lucia and Martinique causing worry for Matthew Henry, a banquet co-ordinator at the Hamilton Princess, who is a native of St. Lucia.

"They knew of it at the last minute," he said speaking of his family. "They thought it was headed to Barbados but it came to St. Lucia. None of them have been evacuated. There is still a lot of rain and wind but it's better than it was on Thursday night, none of their homes were damaged."

Meanwhile former Bermuda resident Daniel Moller, who now lives in the Cayman Islands, said people there are prepared for the worst.

"Many businesses closed at noon and people have been boarding up their homes," he said.

"I have a house guest and we are going to try and evacuate, possibly to Miami.

"Extra flights have been put on tomorrow so hopefully we will be on one of those. People are being really cautious because they remember Ivan [ a hurricane that devastated Cayman in 2004]. People are definitely getting ready for it but the funny thing is today is beautiful. There isn't even a cloud in the sky."

Meanwhile Brad Kading, president of the Association of Bermuda Insurers and Reinsurers, said: "The Class 4 insurers in the ABIR membership are very well capitalised. They are well positioned to handle hurricane claims.

"That is what they are in business for. Storms such as this are expected."

He added that any estimation of the financial impact of a hurricane this size would be purely speculative.

And Flagstone Re, which just took over Island Heritage in the Cayman Islands, said the company was prepared for Dean.

David Brown, CEO of Flagstone, said: "We and our colleagues at Island Heritage our monitoring this storm closely. Island Heritage is well prepared for such a storm given their experience in Hurricane Ivan in 2004 (see photos above).

"Operationally, they have a disaster management programme in place and will be ready to serve clients if needed. Financially they have significant catastrophic reinsurance in addition to their solid capital base."

Some hurricane sites have predicted that Dean could become a catergory four hurricane by Thursday.