The US insurance industry is counting on an above-average hurricane season this year to boost property insurance premiums, but the rises won’t return to the levels seen in previous market cycles, according to Fitch Ratings.

It says the abundance of existing underwriting capacity for primary and reinsurance property coverage is “likely to diminish the magnitude of any upward price movement compared with past market cycles”.

Fitch says given the industry’s strong capital position, it would probably take storm losses equal to 15% or more of industry aggregate surplus to change the property and casualty industry’s outlook to negative.

Director Christopher Grimes says US insurers could face “torrential blowback” if there is a record-breaking storm or cluster of storms in quick succession.

He says meteorologists have predicted an average hurricane season, but storm forecasters Tropical Storm Risk (TSR) last week gave an 80% chance of it being the most active hurricane season in the Atlantic in four years.

TSR is forecasting 17 named storms, nine hurricanes and four major (Category 3+) hurricanes between June and November.

Fitch says there is a growing interest in transferring risk from traditional reinsurance to catastrophe bonds and collateralised reinsurance vehicles.

So far this year catastrophe bonds worth $US2 billion ($271.5 billion) have been issued.