Just when the insurance industry was busy working through its losses from Hurricane Charley, Hurricane Frances barreled through Florida, leaving more than $5 billion worth of insurable damage in its wake.

Frances made landfall in Florida only three weeks after Charley left insurers with almost $7 billion in damage. Most of the damage is expected to be covered through mitigation efforts such as the Florida Hurricane Catastrophe Fund, a reinsurance like entity funded by a portion of insurance premiums, and the Citizens Property Insurance Corp., a state-regulated association that provides property insurance when it is unavailable from the regular market. But industry observers expect property and casualty insurers to feel the pain, nonetheless, when it comes to third-quarter earnings.

“All of the companies we follow have already blown through a typical third quarter’s catastrophe load and, as such, we expect to bring EPS estimates down for all of the companies,” said an analyst at Legg Mason Wood Walker, Michael Paisan.

Estimates vary for Hurricane Frances, with AIR Worldwide, a risk modeling agency, issuing a broad of range of between $5 billion to $10 billion in damage. The director of atmospheric science at AIR Worldwide, Peter Dailey, said the firm expects the total to fall at the lower end of the range.

Risk Management Solutions, a catastrophe modeling agency, estimated insurable damage between $3 billion and $6 billion. That’s a far cry from concerns last week from AIR Worldwide, along with analysts at firms such as UBS, that Frances would outpace 1992’s Hurricane Andrew as the costliest storm in American history. Andrew cost the insurance industry about $15.5 billion.

Mr. Paisan said in a research note that Allstate Corp., the Hartford Financial Services Group, Chubb Corp., and St. Paul Travelers Corp., will be the most impacted by losses stemming from the combination of Charley and Frances.

Rebecca Hirsch, a spokeswoman for Allstate, which has the highest exposure of a publicly traded insurer with 11.4% market share in Florida, said it’s too early to provide a dollar figure for losses related to Frances or estimate any impact regarding the third quarter. The company did, however, announce last week that it expects losses from Hurricane Charley of about $276 million, or 40 cents a share, after a $155 million reimbursement from the Florida Hurricane Catastrophe Fund.

Representatives from Chubb and St. Paul Travelers, likewise said the companies are still assessing damage from Hurricane Frances and couldn’t comment on third-quarter earnings. Chubb estimates pretax losses of $35 to $40 million from Hurricane Charley while St. Paul Travelers expects losses of $140 million after tax and reinsurance.

Representatives from Hartford weren’t immediately available for comment.

“It’s certainly going to be a painful quarter for insurers with up to $13 billion in losses (from the two storms),” said Robert Hartwig, chief economist at Insurance Information Institute. “But with the post-Andrew reforms, we’re not looking at any insolvencies or even any downgrades of companies.”

Mr. Hartwig added that the Florida Hurricane Catastrophe Fund, which is funded by the insurance industry, has the ability to pay up to $15 billion in claims. Only $2 billion was taken from the fund to cover costs related to Hurricane Charley, and Hartwig estimated that Hurricane Francis will drain the fund out of an additional $1.5 billion, leaving plenty in reserve.

Prudential analyst Jay Gelb said last week that if insured damage from Frances exceeded $15 billion, it would have led to a harder commercial insurance and reinsurance market. But he said yesterday the “trend appears unlikely to surface based on the initial damage estimates from Frances and the previous damage from Charley.”

Even so, insurance stocks were higher, with Allstate up 1.4% to $47.67, Chubb gaining 1.1% to $69.36, St. Paul Travelers up 1.4% to $34.79 and Hartford climbing 1.5% to $62.13 in recent trading.

Mr. Gelb said property and casualty stocks tend to rally after a major hurricane, based on the perception that insurers will be in a position to raise rates.

But Fox-Pitt Kelton analyst William Yankus said despite the back-to-back catastrophic storms, it’s unlikely that the storms will be sufficient to shift the broad softening in rates seen in the insurance industry. He added that Florida-specific exposure will be the exception, with expected property insurance prices seen decelerating their pace of decline or even increasing modestly.

With Hurricane Charley and Hurricane Frances in the past, market observers are already looking towards another major storm brewing in the Caribbean: Hurricane Ivan.

“As we saw with Charley and Frances, even if it’s only a few days away from land, there’s still a lot of uncertainty” regarding its path, said AIR Worldwide’s Dailey. “It’s just too soon to tell.”

But while insurance industry observers are keeping an eye on Ivan, I.I.I.’s Mr. Hartwig said there is a sense of confidence that mitigation efforts, put in place after Hurricane Andrew, have worked.

“These storms were the first major test and they made a world of difference,” he said. “The industry cut losses by a few billion dollars… we now have a market that’s relatively stable.”