It will be difficult for some insurers to fill some of theirreinsurance needs, and the catastrophe bond market will be active,Fitch Ratings' guide on hurricanes predicts.

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The guide to hurricanes for insurance investors is aimed ataiding them through the hurricane season that officially startedyesterday and runs through Nov. 30.

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The special guide, “Hurricane Season 2006: A Desk Reference ForInsurance Investors,” offers statistics, discussions on insurance,climate issues, hurricane modeling, incorporation of hurricanerisks into the rating process, and a frequently asked questionssection.

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“Four prominent hurricane forecasting organizations have issuedforecasts for the 2006 season and they unanimously predict anotherabove-average hurricane season in terms of the number of namedstorms, the number of hurricanes and the number of majorhurricanes,” Donald Thorpe, senior director, Fitch Ratings inChicago, said in a statement.

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“After back-to-back severe hurricane seasons in 2004 and 2005,investor interest in the effects of hurricanes on insurer financialstrength and debt servicing capacity is greater now than any timesince Hurricane Andrew in 1992,” added Mr. Thorpe.

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Among some of the discussion points raised in the guide, Fitchsaid it believes primary insurers will bear the brunt of lossesthis season as some are having problems with their reinsurancerenewals.

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Reinsurers do not want to experience the heavy losses theysuffered in 2005, so premiums have increased dramatically andcapacity has been cut back to reduce exposure. The alternative,Fitch said, is to either go bare or turn to the alternativemarkets, such as catastrophe bonds and industry losswarranties.

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Fitch predicts an active catastrophe bond market, but saidselling Atlantic hurricane exposed risks will be a challenge.

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The guide is available on the rating service's Web site tomembers at www.fitchratings.com, under Financial Institutions,Insurance, Special Reports.

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