Reinsurers’ catastrophe losses could reach as high as $190 billion this year and force the hardest-hit firms to raise capital to keep their credit ratings.

That is the view of Fitch Ratings analysts who said 2017 could prove to be a year of record catastrophe losses for the reinsurance industry.

However, the industry has a sufficiently strong capital base to cope with the losses, Fitch added.

Upper-end loss estimates for Hurricane Maria alone are $85 billion, according to catastrophe-modelling form AIR Worldwide, with four fifths of the losses in Puerto Rico.

AIR’s estimate sparked a sell-off yesterday in the shares of Bermudian-based insurers and reinsurers thought to have exposure. XL Group fell 3 per cent, while Aspen Insurance Holdings dipped 2.6 per cent and Everest Re 1.6 per cent.

The Maria losses comes on top of $50 billion in upper-end expected losses from Hurricane Irma, $25 billion from Hurricane Harvey, $3 billion from

Mexico earthquakes and over $20 billion in first-half catastrophic losses from various other events.

“Following the devastation caused by Hurricane Maria, 2017 catastrophe losses for the global insurance and reinsurance sectors will exceed $100 billion and could reach close to $190 billion on a pretax basis,” Fitch said in a statement yesterday.

“Given the magnitude of the Maria-estimated losses, we now believe that 2017 catastrophe losses will constitute a capital event for a number of re/insurance companies, as opposed to just an earnings event.”

The agency added that the industry’s very strong capital levels totalling around $600 billion, which “greatly limit any risks to solvency”.

However, the losses “could weaken capital at some re/insurers and increase the risk of rating downgrades”, Fitch added.

There is a heightened risk of a capital decline for the year for some re/insurers.

“In some cases, this could result in ratings downgrades if not addressed through capital raises or other mitigating actions,” Fitch said.

Analysts from Morgan Stanley estimated the losses from recent hurricanes and earthquakes at between $83 billion and $165 billion. But it added that the global property and casualty insurance sector had capital of $700 billion and could take the hit.

While the sector could withstand losses of more than $100 billion, “the losses will significantly impact earnings and excess capital positions”, Morgan Stanley said.

The New York investment bank added that the losses “should start improving property (insurance and reinsurance) pricing”.