As Hurricane Ike churned toward the Texas Gulf Coast Friday, there was nearly US$1 trillion of insured commercial and residential property in its path, according to firms that specialise in catastrophes.
The largest concentrations of exposure in Texas are along the northern part of the coast near Houston - an area that contains about one-fifth of the United States' crude-oil refining capacity and more than two million people.
Oil prices dropped to US$100 per barrel Friday.
While high winds and flooding are of concern for inland properties, a hurricane's strength diminishes as it moves inland.
"Hurricane Ike's large windfield will play a major role in the extent of damage it inflicts both offshore, from winds and waves, and onshore, from wind and storm surge," said Christine Ziehmann, director of model management at Risk Management Solutions (RMS) Inc.
insured exposure
RMS estimates there is more than US$70 billion worth of insured exposure bordering Galveston Bay and the outermost Houston Ship Canal.
An additional US$900 billion of insured properties lies further inland, within Houston's Harris County, the Newark, California-based firm said.
Catastrophe risk-modelling firm AIR Worldwide Corp, based in Boston, said 85 per cent of Texas' total coastal exposure lies in Ike's' path, with insured property valued at more than $890 billion.
"The worst-case scenario would be Ike coming onshore 30 miles (50 kilometres) west of Galveston, which is further west than currently forecast, but well within the bounds of possibility," Ziehmann said.
Ike's eye was forecast to strike somewhere near Galveston, Texas, late Friday or early Saturday, but the massive system was already buffeting Texas and Louisiana, causing flooding along the Louisiana coast still recovering from Labour Day's Hurricane Gustav.
Ike was at Category Two strength Friday, but was considered likely to strengthen to Category Three before it made landfall.
gustav estimate
Last week, RMS revised its initial industry-loss estimate for Gustav, now ranging from US$2.5 billion to US$4.5 billion, down from an estimated range between US$4 billion and US$10 billion in damage.
Ike has already wrecked havoc in the Caribbean, with damage in the popular Turks and Caicos Islands and Bahamas estimated to range between US$50 million and US$200 million, according RMS.
US insurance companies, still working on claims from Gustav, were ready with adjusters and appraisers to assess Ike's damage.
deploying teams
"Once it is safe to do so, we are ready to deploy our teams and respond to the impacted areas to assist policyholders with immediate claim needs," said Mike Siemienas, spokesman for the property, casualty and auto insurer Allstate Corp.
Allstate is among the companies with the most exposure in Texas, according to figures compiled by rating agency A.M. Best Co.
Other companies that have significant exposure to the state include State Farm Insurance Cos, Farmers Insurance Group, USAA, The Travelers Cos and American International Group Inc.
- AP
