An exchange traded fund indexed to the insurance sector rallied nearly 6% on Monday on relief Hurricane Irene didn’t cause as much damage on the East Coast as initially predicted.

Property and casualty insurers surged Monday as the Northeast wasn’t hit as hard as expected by the storm. Still, Irene did cause extensive damage along the coast and was responsible for several fatalities.

Large insurers Allstate Corp. (NYSE: ALL) and Travelers Cos. (NYSE: TRV) soared on Monday. These companies, among other insurers, took a heavy blow at the end of last week as investors anticipated widespread destruction, especially in the New York region.

Travelers is the top holding in SPDR KBW Insurance ETF (NYSEArca: KIE), which climbed 5.7% on Monday.

Research firms estimate that total losses will be much less than the initial expectations that ranged in the tens of billions of dollars after the hurricane winds speeds died down over the weekend, reports Corrie Driebusch for The Wall Street Journal. [Insurance ETFs Fall as Hurricane Irene Looms]

“We think it is safe to say that loss expectations are lower than many investors thought last Thursday and Friday when forecasts shifted to show a more inland path for the storm,” FBR Capital Markets said in the report. The analysts caution that third quarter earnings will still suffer, nonetheless.

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