Atlantic hurricanes Harvey, Irma and Maria will affect industry-wide dynamics, according to AM Best.

“Although each of the three major hurricanes was damaging in its own right, the aggregate effects of these storms is what is most likely to reshape the industry,” the ratings agency says.

“Primary insurers suffered large losses, but they were prepared for these events and had appropriate reinsurance programs in place, aided largely by soft reinsurance pricing.

“With a portion of losses ceded to the reinsurance and retro markets, the companies with concentration issues will be the most affected by the third-quarter catastrophes, and most have reported significant underwriting losses for the quarter.”

Early indications suggest overall losses from the hurricanes may be upwards of $US90 billion ($111 billion). Primary insurers, traditional reinsurance, collateralised reinsurance and insurance-linked securities (ILS) will bear the losses.

It is far too early to determine which catastrophe bonds will pay out, but investor appetite for the asset class remains strong even after the losses.

“Investors are still viewing ILS as worthwhile investments to increase yield, specifically for cat bonds in riskier tranches, and investment in ILS should continue to grow while other spreads remain compressed,” AM Best says.

“Sophisticated investors recognise that ILS are high-yield vehicles that are not correlated with the overall markets and thus provide a hedge against market downturns.”