Mon Aug 16, 2004

NEW YORK (Reuters) - U.S. insurers on Monday predicted that Hurricane Charley could be the most costly U.S. storm since Andrew in 1992, with Florida officials initially estimating economic losses at $15 billion.

Hurricane Charley killed 16 people and left thousands homeless as it swept over southwest Florida on Friday, with winds topping 145 mph (233 km per hour).

Insurers say it was too early to issue precise estimates on losses from Charley, the most devastating storm to hit Florida since Hurricane Andrew, which ripped up parts of the Greater Miami area in 1992 and caused about $25 billion in damage.

But the Florida Division of Emergency Management said Sunday that Charley's destructive rampage through Florida cost at least $15 billion, according to preliminary damage estimates.

Allstate Corp. (ALL.N: Quote, Profile, Research) , the No. 2 U.S. home and auto insurer, said potential losses stemming from Hurricane Charley could hurt its current results. However, the Northbrook, Illinois, company said it did not expect losses to have a material effect on its financial condition overall.

State Farm Insurance Cos. said Sunday it received 19,454 homeowners and 1,552 auto claims related to Charley and expected the total to rise.

Reinsurer Munich Re has said that insurers overall would likely pay $7-14 billion (5.66-11.32 billion euros), based on its own research.

Florida insurer 21st Century Holding Co. (TCHC.O: Quote, Profile, Research) said it will record a $1.25 per share charge against third-quarter earnings due to claims from Charley losses. The company also cut its 2004 earnings outlook to $2.50 per share.

Allstate shares rose 43 cents to $46.36 Monday on the New York Stock Exchange, while 21st Century lost $1.46 or 7.4 percent, to $18.29 on Nasdaq.

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