WASHINGTON — The $7 billion in estimated losses from Hurricane Irene compound the vast damage caused by weather in the United States this year. Yet despite the billions that big insurance companies have paid out for floods, tornadoes and earthquakes, they can expect another profitable year.
And their customers can expect higher premiums.
The stocks of major insurers shot up Monday as investors celebrated Irene’s less-than-expected damage. The storm didn’t even cause most analysts to adjust their profit estimates for insurers.
In part, that is because insurance companies have been raising premiums this year, especially for customers in high-risk areas. Homeowner and auto policies cost 5 percent to 10 percent more than they did a year ago, according to research by Gregory Locraft, an industry analyst with Morgan Stanley.
The damage from Irene and other disasters means that property insurance premiums will likely rise across the board into 2012, Locraft said.
“Irene is just another log on the fire,” he said.
The storm seems unlikely to hurt the overall U.S. economy. Analysts agree that damage from Irene will likely run less than $10 billion — a tiny fraction of the $14 trillion U.S. economy.
Reconstruction might even strengthen areas hit hard by Irene, analysts said. Rebuilding homes, repairing cars and fixing streets and bridges should help boost those local economies late this year and early next year, they said.
Irene is the 10th U.S. weather disaster this year to have caused more than $1 billion in damage, according to the National Weather Service — the most for any year on record dating back 30 years. And 2011 is hardly over.
