There was market relief for insurers as the downgrade of Hurricane Irma in the United States raised the prospect that costs for the industry may be lower than initially feared. As Laura Frykberg reports, the estimated insured loss in the U.S. resulting from Irma has been cut to $20-40 billion
It's wreaked havoc across.. Parts of the U.S. state of Florida.. But the impact of Hurricane Irma on the markets... Hasn't been quite as damaging. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "For the moment it looks like the market could escape some of the earlier, more dire predictions, largely because of the emergency efforts and also because the storm has weakened quite considerably before making US landfall. " Europe's insurance index rose 2 percent in early trade. Its best day in more than four months. Also helped by a lower insurance cost estimate of between 20 and 40 billion dollars. (SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "The most important thing is that there isn't any rate increase. America will be rebuilt, Florida too. Americans are pioneers, so yes, they can do it." There could be problems ahead for the industry though. Insurers are struggling to find enough inspectors across Texas and Florida... To keep up with the number of claims from property owners. And a backlog of cases, say some. could push the industry into crisis. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "The possibility is that you get a run on the claims, and that destabilises some marginal or weak players, and there's a bit of a domino effect. I don't expect a large scale collapse, but you could see some insurance sector dislocations appearing." A similar warning has come from rating agency Moody's... Which says both local insurers.. And global reinsurers...will face big losses from Irma. It could be a case of the calm for this industry.. Before the storm.