Insurance companies are likely to face claims of between $750 million and $1.5 billion as a result of damage caused by Hurricane Dean in the Caribbean and Mexico.

As the storm moved across the Yucatan Peninsula of Mexico and quickly lost power, being downgraded from a category 5 hurricane to a category 2 within 12 hours of striking land, analysts were beginning to predict lower insured loss figures than had at first been proposed.

A slight shift in the direction of the powerful storm meant it avoided a direct hit on Jamaica and spared the Cayman Islands. It then hit the Yucatan Peninsula in a less densely populated area, steering away from the tourist destinations of Cancun and Cozumel.

On Sunday, California-based extreme risk modeller EQECAT estimated damage in the Lesser Antilles islands and Jamaica to be between $1.5bn and $3bn.

However, more recent estimates reflecting the fact the hurricane missed directly hitting heavily populated places, are lower.

Boston-based catastrophe modeller AIR Worldwide said it did not expect insured losses for Jamaica to be any more than $1.5m as the most destructive part of the storm, the eye of the hurricane, had spared Jamaica's capital Kingston. Late yesterday AIR estimated that insured losses in Mexico would not exceed $400m.

According to catastrophe risk management company Risk Management Solutions, the likely range of insured losses is between $750m and $1.5bn. Of this, only up to $300m is expected to be from damage to the Mexican coast, with most of the remainder resulting from the storm's destruction in Jamaica, according to a PR NewsWire report.

"Dean has taken an extraordinarily fortunate track, slipping between St Lucia and Martinique and striking a scarcely populated area of the Mexican coast. Given its intensity, the Caribbean and Winward Islands have faired relatively well," said Dr. Claire Souch, senior director of model management at RMS.

The first category 5 storm since 2005 was packing winds of 160 miles per hour as it struck the southeastern Yucatan Peninsular coast in a relatively sparsely populated area. If Hurricane Dean had come ashore 150 miles further north it could have been a different story as it would have hit the tourist cities of Cancun and Cozumel and likely caused three times the amount of damage to insured property.

"Though Jamaica has taken a large hit, the track for a category 5 storm could hardly have been better planned to minimise the damage," said Dr. Souch. "Dean's impact in Mexico will be similar to Hurricane Emily's in 2005, which was a category 4 storm and caused around $250m of insured loss. If Dean had made landfall in the north of the Yucatan Peninsular coast, we could have been looking at a near repeat of Hurricane Wilma, which devastated the area and resulted in insured losses of some $1.8 billion."

Bermuda insurer Hiscox said this week that the storm should not cost the firm too much, providing it steers clear of Florida and oil production areas in the Gulf of Mexico.

Hurricane Dean has remained a fairly small, although fast-moving storm. It originated as a vigorous tropical wave off Africa's west coast on August 11.

The storm is expected to continue decreasing in intensity as it crosses the Yucatan Peninsula it will decrease in intensity, but will likely maintain a category 1 to 2 hurricane status before emerging into the Bay of Campeche where it is not expected to cause much damage, despite being the location of much of Mexico's oil production.