For 3 to 7 percent of insurers exposed to the catastrophe, that could spell disaster, Williams said. Likely to fail are thinly capitalized property casualty carriers that are low-rated at Best, along with some firms not rated at all.

"This will take a bigger bite out of the industry than the 1906 San Francisco earthquake," Williams said.

Insurance costs from last year's major catastrophes, or "megacats" -- Hurricanes Katrina, Rita and Wilma -- have already reached US$58 billion, with some claims still in court. In addition, federal aid to rebuild areas such as New Orleans, which was flooded by Katrina, will top US$100 billion, Best said.

With population expansion in vulnerable areas and soaring real estate values, catastrophe losses are likely to double every 10 years, according to hurricane modelers. In Florida, which has seen five major hurricanes in the past two years, four insurers have already failed, according to Best.

When insurers are no longer around to answer the phone, the burden falls to the state, which sets up a claims fund and forces solvent insurers to pay the costs. But settlements are slow, particularly after a catastrophe like Katrina has damaged the infrastructure, Williams said.

DECLINING TO WRITE

Insurers are also running from areas where storm damage is likely to be the worst. American International Group Inc., the world's largest insurer, is declining to write new property policies in areas of the Gulf Coast, while Allstate Corp., the US's second-largest home insurer, is limiting exposure in areas as far north as New York.

While no one knows where hurricanes will hit this year or in the future, they are almost certain to arrive, fueled by warmer than usual water temperatures and new wind patterns in the Atlantic, forecasters said.

Professor Mark Saunders, head of the British-based Tropical Storm Risk Venture, which plots storms, is expecting two major storms to hit US coastal areas during the hurricane season, which runs for six months through November.

These megacats won't be confined to the Gulf Coast, which has seen the worst of the recent storms. "The specter of a hurricane hitting a major Northeast population center is hardly the stuff of Hollywood fantasy," warned Wendy Baker, president of Lloyd's America, a unit of the insurance syndicate, in a speech on Thursday.

Six of the 10 costliest storms in US history have occurred within the 14 months of the 2004-2005 hurricane season. While 2006 isn't expected to suffer the megacats of 2005, it will be part of a pattern that has seen the most devastating pattern of hurricanes since 1900, said Saunders.

On Wednesday William Gray and his Colorado State University forecasting team repeated their prediction that the 2006 season would produce nine hurricanes, five of which would be major storms with winds over 110 miles her hour.