UPDATE 1-Risk modeller AIR sees 200-400 mln euro quake cost

LONDON, April 8 - Insured losses from Italy's worst earthquake in three decades are likely to total between 200 million and 400 million euros ($263.8 million and $527.6 million), catastrophe risk modelling firm AIR Worldwide said.

The estimate covers losses to residential, commercial and industrial buildings and contents from the magnitude 6.3 earthquake that struck the Abruzzo region of Italy on Monday. It does not include losses from interruption of business.

"While damage from this event will likely be between 2 billion and 3 billion euros given the scale of destruction, insured losses will be limited due to the low penetration of earthquake insurance in the region," said Guillermo Franco, senior engineer at AIR Worldwide, in a statement.

"Damage to commercial properties will likely drive the insured losses, since a higher proportion of businesses tend to purchase earthquake insurance."

AIR cited a 2004 report by insurance market information service AXCO which said less than 2 percent was insured of an estimated $4.5 billion in economic losses from a magnitude 6.0 quake that struck the nearby Umbria-Marche region in 1997.

AIR said it would send a reconnaissance team to the affected area once search and rescue operations have ceased.

More than 250 people were killed and over 1,000 injured by Monday's tremor, and authorities estimate 17,000 people lost their homes in the town of L'Aquila and surrounding villages.

Some residents and experts have expressed anger that even supposedly earthquake-proof modern buildings had collapsed.

Insurance regulator ISVAP told Reuters on Tuesday that Italian insurers were likely to have only moderate exposure to earthquake damage claims in the L'Aquila area, where activity is focused on tourism and agriculture rather than industry.

On Tuesday, Munich Re, the world's biggest reinsurer, also said insurance exposure to Italian earthquake sites is relatively low. ($1=.7582 Euro)