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Reinsurers braced for Irene’s impact

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Bermuda reinsurers are bracing for Hurricane Irene with estimates of insured losses climbing to nearly $14 billion.

The largest losses are expected in the US Northeast, particularly in the New York area.

Irene may cause $13.9 billion in insured losses and a massive $20 billion in overall economic losses due to lost hours at work, power failures and interruption of shipping and airline traffic, according to estimates based on the latest forecast track and provided last night by Kinetic Analysis Corp, a catastrophe-modelling organisation.

Bermuda’s reinsurers provide an estimated 40 percent or more of the property catastrophe reinsurance to US insurers.

“This number can be higher or lower depending on the region where the event occurs,” said Bradley Kading, head of the Association of Bermuda Insurers and Reinsurers. “The more severe the event the higher level of reinsurance coverage.”

Forecasters have warned that even if the centre of Irene stays offshore as it tracks up the mid-Atlantic coast, its wide bands could lash cities like New York and Washington with winds and rain, and knock out power and trigger flooding.

According to wire reports, New York’s Mayor Michael Bloomberg and city officials are planning for a storm with winds of at least 60mph accompanied by heavy rain.

They expect the brunt of the storm to cross mid-Long Island, on the border of Nassau and Suffolk counties, east of the city, he said.

The head of crisis management at Cushman & Wakefield, which manages more than 1,100 properties on the East Coast, said New York could suffer historic levels of damage and significant flooding due to storm surge if winds approach 100 miles per hour.

Only five hurricanes on record dating to 1851 have tracked within 75 miles of New York City, the most recent being Gloria in 1985, according to the National Weather Service.

Irene is expected to come ashore Saturday in North Carolina.

Storm: A man walks along the waterfront in Nassau in The Bahamas as Hurricane Irene passes to the east
Cars clog the roadway to the Hampton Roads Bridge Tunnel as Hurricane Irene approaches, Thursday, Aug. 25, 2011, in Norfolk, Va. Forecasters at the National Hurricane Center Thursday afternoon also issued the first warnings for the entire North Carolina coast to the Virginia border. One is also out for the coast of South Carolina from Edisto Beach north. (AP Photo/Steve Helber)

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Published August 26, 2011 at 10:39 am (Updated August 26, 2011 at 10:39 am)

Reinsurers braced for Irene’s impact

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