Reinsurers face a rough ride if natural catastrophe losses match or surpass last year’s total, S&P Global Ratings says.

The industry dealt with record insured losses of $US138 billion ($187 billion), including $US92 billion ($125 billion) from three major hurricanes that hit Texas, Florida and the Caribbean islands last year.

But the outcome may be different should another active year unfold.

“Although we assume reinsurers have entered the North Atlantic hurricane season with robust earnings and capital buffers, a repeat… could test earnings and capital adequacy levels,” the ratings agency says.

“In such a scenario, negative rating actions could result for overexposed reinsurers.”

The top 20 reinsurers tracked by S&P met 20% of insured losses, which the ratings agency estimates represents about a one-in-25-year aggregate loss for the group.

While the loss magnitude was three times an average natural catastrophe year’s, reinsurance prices have remained stable.

S&P estimates the industry has set a natural catastrophe budget this year of $US11 billion ($14.9 billion), which should produce a $US21 billion ($28.4 billion) pre-tax profit if insured losses fall within projections.