Oct. 31 (Bloomberg) -- The snowstorm that hit the U.S. Northeast over the weekend, knocking out electricity to millions of customers, caused $1 billion to $3 billion in damage, according to risk-modeling firm Kinetic Analysis Corp.
The estimate includes insured and uninsured damage, Chuck Watson, director of research and development at Silver Spring, Maryland-based Kinetic, said today in a telephone interview. He said the biggest costs for insurers will come from businesses that lost power, while non-commercial claims will be for home and car damage.
“I don’t see this as a big impact on insurers,” Watson said. “It’s certainly not going to be anything that will cause them any big stress.”
The storm could generate thousands of insurance claims, the New York-based Insurance Information Institute said in a statement. More than 2 million homes and businesses were still without power earlier today in states including Connecticut, New York and New Jersey. Hurricane Irene, which hit the U.S. East Coast in August, was the most expensive storm of the year, with as much as $10 billion in damage, Watson said in an e-mail.
The snowstorm was “probably not of the same magnitude as the events we had in the third quarter,” which included Irene, Allstate Corp. Chairman and Chief Executive Officer Thomas Wilson said today in a phone interview. The insurer reported catastrophe losses of $1.08 billion in the three months ended Sept. 30.
Allstate has raised rates for coverage and scaled back the number of homeowners’ policies to control risk from natural disasters.
“We’ve continued to make progress improving that, but you can’t outrun the weather,” said Wilson.
--With assistance from Noah Buhayar in New York. Editors: Dan Reichl, Peter Eichenbaum
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