Hurricane Sandy Losses Expected to Top Irene’s

Hurricane Sandy appears to have easily caused more losses than last year’s Hurricane Irene, but final totals will be hard to come by for some time because of the scale of the disaster, catastrophe forecasting companies said.

Sandy left millions without power, caused widespread flooding that may shut New York City’s subways for days, and killed potentially dozens of people up and down the U.S. east coast.

RMS, one of the three primary firms used by the insurance industry to calculate disaster exposures, indicated that Sandy should outdo the roughly $4.5 billion in insured losses Irene caused after hitting the northeast in August 2011. “Sandy event is much more severe…and has impacted NYC to a much worse degree than Irene,” RMS said in a storm report last week.

Its assessment follows that of peer Eqecat, which said earlier last week that Sandy was likely to cause anywhere from $5 billion to $10 billion in insured losses and from $10 billion to $20 billion in economic losses. If Eqecat is correct, Sandy would rank as the fifth-worst hurricane in history, based on inflation-adjusted losses, according to the Insurance Information Institute.

Most financial analysts expect that an insured loss of even $10 billion would have little effect on the insurance and reinsurance industries, aside from a probable hit to fourth-quarter earnings.