Ratings agencies A.M. Best Co. and Standard & Poors said they were pouring over both public and private information from the insurance and reinsurance companies they follow, in early attempts to assess the financial impact of Hurricane Katrina, a storm that could leave the insurance industry will a bill in excess of $20 billion.

Both said the industry was expected to have adequate capital to meet claims, but it did not rule out the prospect of some companies individually being hit with ratings downgrades if losses go high enough to diminish capital adequacy.

S&P, separately, said it had concerns that Katrina-related losses could undermine the capital adequacy at Bermuda mutual insurer, Oil Insurance Ltd. (see separate story)

Katrina, a deadly storm that reportedly killed thousands of people, left much of Mississippi and Louisiana and some part of Alabama, torn up and under water. It also wreaked havoc on oil refineries and rigs in the Gulf of Mexico.

The industry, as a whole, is still a long way from a solid estimate for what Hurricane Katrina?s devastation of the Gulf Coast earlier this week could cost, with estimates of $9 billion up to $30 billion having been made.

Both ratings agencies, in separate statements yesterday, said Katrina?s final bill could top Hurricane Andrew?s, as the costliest hurricane ever, with the 1992 storm that caused devastation in Florida draining $22 billion, in today?s dollars.

Reinsurers, including Bermuda companies, are expected to have to pick up a large part of the bill.

However, Best said that even if claims from Katrina top $20 billion, that is only six percent of the industry?s entire capital held in surplus.

Best said it was asking companies to produce preliminary modelled loss estimates, or ranges. As well, it is scrutinising companies? individual models for their own catastrophe exposure, comparing this to how active they were in selling policies in the region, while also evaluating how much reinsurance insurers hold to spread the risk in policies sold.

S&P ratings analyst Damien Magarelli said: ?We have analysed probably maximum loss data, confidential catastrophe surveys, modelled estimates and market-share figures.?

Flooding along the Gulf Coast region continued to block claims adjusters access to some areas yesterday, delaying the process of reaching a reasonable estimate of what the total bill for insurers and reinsurers could be, according to S&P.

It said insurance claims for business interruption were likely to add to the already mounting price insurers will have to pay to fix property damage from both the storm and flooding. And it was not yet clear who would pick up the tab for flooding with some question over whether the National Flood Insurance Program will be left to pay instead of insurers and reinsurers.

The NFIP generally covers residential water damage if it is not wind-driven, as it could be in a hurricane. Because it may be difficult to determine if water damage was wind-driven or not, some expect disputes to crop up over who should pay, delaying settlement.