Insured losses from Hurricane Irene are unlikely to rapidly harden the market as expected, according to market analysts.

“It would appear from first glance that the insured damage will be much less than initially feared,” said Eamonn Flanagan, an analyst at Shore Capital.

The latest estimate from US risk modelling firm AIR Worldwide puts the insured loss in a range $3bn to $6bn, having narrowed the range from $2bn to $8bn.

“Of course, the ‘bad’ news from the above is that Irene is unlikely to result in a rapid hardening in the rating environment, despite some $70bn of insured catastrophe losses year to date,” Flanagan continued.

Flanagan noted overnight trading in US and Bermudan insurers saw good recoveries in stock prices with US insurer Hartford up 12% and Axis Capital up 7%.

But the devastating effects of Hurricane Irene are yet to subside with widespread flooding covering large parts of the East Coast.

State officials in Vermont say two-thirds of the state has been inundated by ‘epic’ waters but significant flood claims are unlikely because flood cover is not a standard feature on US home insurer policies.

Any flood losses are likely to be from commercial and business interruption cover but Lloyd’s insurers and international reinsurers are unlikely to be hit by flood claims, according to Flanagan

“Where cover is offered on homebuyers policies, we suspect that the loss will be retained by the large US domestic insurers (such as Allstate) rather than being taken by the reinsurance market.”