Irene likely to lead to higher insurance premiums

WASHINGTON (AP) -- The $7 billion in estimated losses from Hurricane Irene will compound the vast damage caused by weather in the United States this year. Yet despite billions they've paid out for floods, tornadoes and earthquakes, big insurance companies can expect another profitable year.

And their customers can expect higher premiums.

The stocks of major insurers shot up on 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's because insurance companies have been raising premiums this year, especially for customers in high-risk areas. Homeowner and auto policies cost 5 to 10 percent more than they did a year ago, according to research by Gregory Locraft, an 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.