Safeco's national catastrophe team began moving into Baton Rouge last night to get their first look at the damage wrought by Hurricane Katrina...

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Safeco’s national catastrophe team began moving into Baton Rouge last night to get their first look at the damage wrought by Hurricane Katrina.

Along with other insurance specialists, they will be looking for policyholders, making sure their customers have places to stay and writing checks to cover the basics for people who must now rebuild their homes and businesses.

The Seattle-based company’s market share is small in the states that were hit hardest — Louisiana, Mississippi, Alabama and Florida.

But that was true last year as well, when four hurricanes in Florida and surrounding states cost Safeco $183 million.

Merrill Lynch estimated Monday that Safeco’s losses would be about $125 million if Hurricane Katrina ended up costing the insurance industry $14 billion. The Safeco figure would jump to $178 million if industry losses are $20 billion.

A Safeco spokesman declined to comment on the estimates.

“Until we can get in there and hear from our policyholders, it’s way too early to be able to venture that type of an estimate,” Paul Hollie said.

Safeco’s exposure

The Seattle insurer handles a small portion of insurance written in the states most affected by Hurricane Katrina. Here’s a breakdown of Safeco’s market share in personal and commercial insurance:

Louisiana: 0.46 percent personal/0 percent commercial

Mississippi: 1.29 percent/0.72 percent

Alabama: 1.5 percent/1.1 percent

Florida: 0.80 percent/0.79 percent

Source: Safeco

Katrina, which was upgraded to a hurricane after it blew through South Florida last week, on Monday slammed into Louisiana and battered southern Mississippi and Alabama.

In those states, Safeco’s share of the homeowners and auto market ranges from just 0.46 percent in Louisiana to 1.5 percent in Alabama. State Farm is the largest homeowners insurer in all four states, with 23 percent to 35 percent of those markets.

For commercial insurance, Safeco’s market share ranges from none in Louisiana to 1.1 percent in Alabama. St. Paul Travelers, Zurich and State Farm have the largest share of commercial insurance in the four worst-hit states.

Preliminary insurance loss estimates for this hurricane range widely, and they fluctuate as new information arrives about what’s happening in New Orleans and elsewhere.

Yesterday afternoon, the Insurance Information Institute guessed the damage would cost insurers about $16 billion but said it could be more costly. Some forecasters are estimating financial losses as high as $25 billion.

The higher estimate would make Hurricane Katrina the most costly hurricane in U.S. history, topping Hurricane Andrew’s $15.5 billion devastation, which in 2004 dollars comes to $21 billion.

Hurricanes typically cost insurers the most on homeowners policies, but this one is likely to be more evenly divided between personal and commercial policies, said Carolyn Gorman at the Insurance Information Institute.

The cost for oil rig insurers alone could be as high as $5 billion, she said.

A big problem for insurers after a hurricane is finding their policyholders, Gorman said.

“You have to get permission from authorities to come into the area, and it’s taking longer than usual because of the rising water in New Orleans,” she said.

Safeco was allowed to start moving into Louisiana last night.

“We want to help people prevent further damage to their structures, and get a good start on the claims process so they can get their lives back together,” Hollie said.

Melissa Allison: 206-464-3312 or