Even as Hurricanes Hanna, Ike and Josephine gain strength in the Atlantic, insurers are still counting the cost of Hurricane Gustav, which turned out to be not quite as vicious as experts had predicted. Gustav was downgraded to a category two storm as it crossed the US gulf states last week.

The cost of damage is nevertheless forecast to reach up to $US10 billion ($12 billion), which is well below the $US68 billion ($81.5 billion) experienced when Hurricane Katrina struck New Orleans in 2005.

More than 2 million people who evacuated the Gulf Coast region are returning home.

Risk Management Solutions says insured losses could range between $US4-10 billion ($4.8-12 billion), incorporating both coastal and offshore losses from wind and storm surge.

But despite Gustav being relatively benign, low air pressures and warm Atlantic water – ideal conditions for forming hurricanes – are worrying weather forecasters, who believe the worst is yet to come.

Standard & Poor’s has warned insurers that if the forecast season of tropical storms continues in a similar vein to the way it has begun, the effects on insurers will be greater than the “triple-whammy” effect of Hurricanes Katrina, Rita and Wilma in 2005.