Disaster modelling company RMS confirmed on Wednesday that it expects insured losses from the Category 1 storm which slammed into the east coast of the United States to reach $20 billion to $25 billion.

At the high end of the range, RMS's estimate exceeds those of peers AIR and Eqecat, whose top estimates were $15 billion and $20 billion, respectively.

Seen at risk of a payout that would prove costly for investors are tranches of two catastrophe bonds issued by Swiss Re through its Successor X and Mythen Re vehicles to cover the reinsurer against losses from U.S. hurricanes.

They are the $80 million F4 tranche of Successor X Ltd's Series 2011-3 bond and $250 million of class H notes issued by Mythen Ltd.

A Swiss Re spokeswoman said the firm could not comment.

Previous commentary from industry participants such as reinsurance broker Willis and credit rating agency Standard & Poor's had suggested Sandy's impact on catastrophe bonds would be muted.

A final decision on whether the bonds have been triggered will come when information-aggregator Property Claims Services (PCS) releases its loss data, which usually comes within 30 days of a storm making landfall.

U.S.-based PCS provides loss estimates which are used by the majority of cat bonds to define whether an insurance event qualifies for a payout under the terms of the deal.

Investors with knowledge of the transactions said it would take $16 billion in insured losses to trigger Successor X's F4 notes, and $22.4 billion of losses for a Mythen Ltd payout.

“Sandy may have caught a lot of investors by surprise,” said one U.S.-based cat bond fund.

Some aspects of Sandy, such as the extensive flooding it caused, are reminiscent of 2005's Hurricane Katrina, claims from which crept up to more than $40 billion, making it the insurance industry's costliest-ever natural disaster and triggering losses on some cat bonds.