Claims are expected primarily from New York, New Jersey and Connecticut, added CFO William Hitselberger, with most losses coming from Tower's direct-insurance business.

Sandy affected Tower directly, as its Jersey City, N.J. and New York City offices were closed for a week following the storm.

Hitselberger outlined Tower's risk-transfer mechanisms, noting the company retains the first $75 million of losses before reinsurance kicks in up to a layer of $150 million.

“We currently expect the loss for our direct-insurance business to be contained in our first layer of reinsurance,” he said. The company will pay reinstatement premiums of up to $20 million on the first layer of reinsurance for additional protection through June 30, 2013, he added.

Fitch Ratings, meanwhile, says in a report that even if losses caused by Sandy were to reach Katrina-like proportions, the insurance industry would still be able to handle it and post a statutory profit.

Analyst Jim Auden notes that “tremendous uncertainty” remains about what the ultimate amount of Sandy's insured loss will be, acknowledging that catastrophe modelers have thus far put a top-figure estimate of $20 billion on the event.

Fitch performed a sensitivity exam of the U.S. insurance industry and individual insurers with hypothetical loss scenarios up to $40 billion, equal to losses from Hurricane Katrina in 2005.

Under the ratings agency's hypothetical scenario, the losses are not expected to change any ratings for the industry or the five companies expected to be most impacted by Sandy.

Analyst Brian Schneider says in Fitch's analysis that the ratings service did make some “broad assumptions” that could differ from what the ultimate loss might be. He says losses were spread through eight states in the Mid-Atlantic and Northeast, with New York, New Jersey and Pennsylvania most heavily impacted. Sixty percent of those losses were assumed to be in personal lines and 40 percent in commercial.

The five companies expected to be most heavily impacted by Sandy claims are State Farm, Allstate, Liberty Mutual, Travelers and Chubb. On the commercial side, the large commercial insurers, such as FM Global and Ace, should also be impacted.

As to how the storm will affect regional insurers, Auden says those carriers are sufficiently reinsured for an event such as Sandy.

Both Auden and Schneider emphasized that their analysis is not a forecast of insured loss but a hypothetical analysis.

Auden says some companies are releasing their loss estimates, but that process could be slowed as the industry grapples with the issue of wind-vs.-flood loss. 

In the Fitch report, a $10 billion insured industry loss is expected to produce an industry combined ratio of 102.9. That number rises to 107.3 under a $40 billion loss scenario.

The report also says Sandy is not likely to change market underwriting capacity and “tip the balance to a hard Property market,” but the recent general uptick in pricing trends is expected to continue into 2013.

Impact Forecasting, Aon Benfield's catastrophe modeler, says Sandy will become “one of the costliest natural disasters in U.S. history,” with extensive damage and at latest count 113 dead.

Impact Forecasting says economic losses will approach or exceed $30 billion and total insured losses are likely to approach or exceed $10 billion, based on preliminary state-released government and industry estimates.