Insurers Jump As Hurricane Irene Damages Not As Bad As Expected

According to Kinetic Analysis Corp., Hurricane Irene's estimated cost to insurers is about $2.6 billion, which is significantly below last week's projections which estimated the cost could be as much as $14 billion. “Insurers may get off pretty easy,” Charles Watson, Kinetic's research and development director, said in a phone interview from Savannah, Georgia. “This one's not the straw that broke the camel's back.”

Risk modeling firm Eqecat estimates that insurance companies may face claims between $200 million and $400 million in North Carolina and South Carolina. “The first initial estimates were that the storm was going to be a lot more severe,” Tom Larsen, senior vice president at Oakland, California-based Eqecat, said in a phone interview. “Sometimes they look big and they're not, and sometimes they blow up really quickly and become a major loss.”

As a result of the lower than anticipated losses, a myriad of insurance companies are rallying in Monday's trading session, helping boost the market as a whole. Hartford Financial Services (NYSE: HIG) has surged more than 8% to $18.61. Travelers (NYSE: TRV) is up almost 5% to $50.62, Allstate Corp. (NYSE: ALL) has added better than 7% to $25.97, and Chubb Corp. (NYSE: CB) has gained 4% to $61.83. Other notable movers include MetLife (NYSE: MET) and Berkshire Hathaway (NYSE:BRK.B), which have added 4.51% and 3%, respectively.