A catastrophe-ridden 2017 could drive global reinsurer profitability to a six-year low, according to AM Best.

The combined operating ratio for the sector is estimated at 110% following hurricanes Harvey, Irma and Maria, along with Mexico earthquakes, compared with a five-year average of 91%.

AM Best’s global reinsurer composite was last above 100% in 2011 when catastrophes included earthquakes in Japan and New Zealand and flooding in Thailand.

The Best’s Briefing report says return on equity this year may range from zero to minus 5% compared to the five-year average 11%, while insured losses associated with the hurricanes and earthquakes could reach $US90 billion ($119 billion).

Based on company feedback, net catastrophe losses for reinsurers will range from $US20-25 billion ($26-33 billion) with an equal amount of losses incurred by alternative capital, mostly in the form of collateralised reinsurance.

“Using history as a lesson, it is not uncommon for losses related to catastrophe events to develop adversely over time, and the complexity is usually a determining factor in this year,” AM Best Senior Director Robert De Rose said.

“Given the complexity of the hurricane events, it would not be surprising to see losses develop well into next year.”