Colonial Group was bracing itself for heavy losses last night as Hurricane Frances bore down on its business in the Bahamas last night.

The group has more than 60 workers split between its property insurers Security and General and health insurers Atlantic Medical.

Peter Oliver, the executive vice president of Property and Casualty Division, said: "This is one of the biggest storms to hit the Bahamas in living memory."

He said Hurricane Andrew hit the top end of the Bahamas whereas strong winds from Frances could hit New Providence, the main island where the capital Nassau is situated.

"That's where 70 percent of our business is located."

He said the group, which acquired the Bahamian companies in 1995, insured 20,000 properties and 12,000 cars in the Caribbean island chain, with most in New Providence and some in Grand Bahama.

Loss adjusters have been dispatched already and others are set to go when flights resume to the 100,000-sq-mile archipelago that extends over 500 miles of the clearest in the Caribbean. Most of the 300,000 population live in New Providence.

The storm was set to affect Eleuthera, the 100 mile long by one mile wide island, which was settled by people from Bermuda seeking religious freedom.

A band of around 70 people, headed by William Sayle, a former Governor of Bermuda, left Bermuda in 1647 to settled there.

Bermudian Guilden Gilbert, 38, moved to the island in 1997 with his Bahamian wife and has his own insurance business there. He is also the President of the Bahamas Insurance Brokers Association.

Last night he was taking comfort from the fact that hurricanes preferred deep water while the water around his New Providence home was shallow.

He said: "This will be the third or fourth hurricane since I came here.

"What happened with the last three was that although they were tracked to hit Nassau it is surrounded by shallow water and hurricanes need deep water."

In fact, when he spoke with The Royal Gazette by telephone last night, Mr. Gilbert said the eye of the storm was due to pass from the south-east to the north-east of Nassau.

"We are having some wind, but it is still some distance away," he said.

The storm was expected to pass over the length of the 80-mile long Cat Island moving on to Eleuthera by 2 a.m. this morning.

Eleuthera stretches from the south-east to the north-east of Nassau, with north Eleuthera about 70 miles away from Nassau.

After Eleuthera, the storm was expected to hit Grand Bahama Island.

At 9 p.m. Bahamas time (10 p.m. Bermuda time) last night Mr. Gilbert said: "The news report did say a few minutes ago that Nassau will experience hurricane-force winds." Hurricane winds extended 80 miles out from the storm's centre and were expected to affect Nassau by about 3 a.m. this morning.

"The wind has picked up, but there is no rain," Mr. Gilbert said last night.

Reports from San Salvador, the Bahamian island which was struck directly by Frances, showed no severe damage to property and no loss of life, he said, adding that houses in the Bahamas are built specifically to withstand hurricane-force winds.

However Mr. Gilbert expected to spend an uncomfortable few days if the power goes down.

Although a lot of his island's power is underground he said the overhead lines were the weak link in the chain but he said repairs were handled very efficiently.

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More on Hurricane Frances: Page 64