MIAMI—The National Hurricane Center issued a hurricane watch for much of coastal North Carolina and said the watch likely will be extended north Thursday as Hurricane Irene approaches the United States.

In an advisory, the Miami-based hurricane center said Irene, a Category 3 hurricane packing maximum sustained winds of about 115 mph, was 610 miles south of Cape Hatteras, N.C. The advisory said the hurricane is expected to approach the coast of North Carolina on Saturday.

Interest in ILWs

The hurricane's approach is generating considerable interest in industry loss warranties, according to a reinsurance intermediary.

Stefano Nicolini, a Westfield, N.J.-based senior vp at BMS Intermediaries Inc., which offers ILW protection, said he has spoken with dozens of companies concerned about potentially significant losses in the Northeast from Irene.

“There's been a lot of talk” about ILW protection and potential buyers will have a better understanding of their risk for losses once Hurricane Irene hits land, he said.

Demand for ILWs already has risen after recent catastrophes such as the March 11 earthquake and tsunami in Japan, he said. Roughly $5 billion to $6 billion of ILW limits are in force currently compared with $4 billion to $5 billion during the same time last year, Mr. Nicolini said.

If Irene ends up generating significant industry losses this weekend, Mr. Nicolini said he expects that companies will start buying even more ILWs between now and year-end. “Irene is generating a lot of opportunities in the ILW market,” Mr. Nicolini said.

“Is there a peak in demand because of Irene?” said Bryon Ehrhart, chairman of the Chicago brokerage Aon Corp.'s Aon Benfield Analytics and Aon Benfield Investment Banking Group. “The answer is no, but the peak” came earlier in the second quarter. He said a lot of ILW trading already got done after the first-quarter losses worldwide as reinsurers sought to protect their risk exposures for the remainder of the year.

Bahamas damage

Meanwhile, the storm passed through the Bahamas on Wednesday and Thursday, striking Abaco Island.

“Nassau, which has the greatest concentration of exposures, is expected to be on the western, weaker side of Irene,” Scott Stransky, a scientist at Boston-based catastrophe modeler AIR Worldwide Corp, said in an advisory issued Thursday. He said that New Providence Island, where Nassau is situated, has a total insured value of $19.5 billion in 2009 dollars, while the island of Abaco has a total insured value of about $1.3 billion in 2009 dollars.

“In 1999, Hurricane Floyd passed just to the east of Abaco Island,” Mr. Stansky said in the statement. “As a result, Irene will likely cause higher losses than Floyd.”

Also Thursday, the National Assn. of Insurance Commissioners announced that it was canceling its summer national meeting in Philadelphia, which was scheduled to begin Aug. 29, because of the potential threat presented by Hurricane Irene.