US property and casualty (P&C) insurers are sufficiently capitalised to absorb costs from hurricanes, according to Fitch Ratings.

But the ongoing soft pricing environment in the US poses a bigger challenge for P&C insurers, Fitch says.

 “[This year] is more likely to be an active hurricane season, according to meteorologists, but minus any extremely severe storms, most insurers should be able to manage losses that may unfold,” Fitch director Christopher Grimes said.

The ratings agency says the industry’s capital strength is “very strong”.

Meteorologists predict an above-normal Atlantic hurricane season, which runs from this month to November 30.

“The real storm for P&C insurers continues to be the competitive pricing environment,” Mr Grimes said.

The reinsurance market remains soft due to large volumes of under-deployed capital and sluggish buyer demand, and pricing on US hurricane-exposed primary property business has not improved following modest insured losses from Hurricane Matthew last year.

Fitch expects pricing conditions to remain challenging in the primary property market – especially commercial property – and in the mid-year reinsurance renewals.