Claims News Service, June 1, 4:19 p.m. EDT — This year’s hurricane season figures to be a challenging one for the U.S. insurance sector both from a meteorological and legal perspective, according to Fitch Ratings in a new report. Some of the most prominent hurricane forecasting organizations are predicting an above-average storm season, which may once again yield very disproportionate conclusions for insurers depending on how severe the storm season is, according to Fitch Senior Director Don Thorpe.

“Primary insurers will incur more losses relative to reinsurers if this hurricane season is one of several small to moderate storms, while reinsurers will likely bear the brunt of financial losses if this season is one of large to very large events,” said Thorpe. “Additionally, with reinsurance pricing peaking last year and primary insurance pricing in high hurricane exposure areas remaining relatively strong, Fitch expects a subtle shift towards relatively more quota share reinsurance in 2007, which may increase the reinsurers’ exposure to multiple storms.”

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