CHICAGO (Dow Jones/AP) ? For property/casualty insurers and reinsurers, 2006?s third quarter can be summed up in two words: no hurricanes.

After a record-breaking hurricane season last year drove down earnings for many insurers, widespread predictions of an active hurricane season this year, fuelled by global warming, simply failed to materialise. No hurricane-strength storms made landfall in the United States through the end of the third quarter.

The mild third quarter was enough to persuade Bear Stearns & Co. analyst David Small to raise his per-share earnings estimates by as much as 60 cents for insurers with significant catastrophe exposure.

He raised estimates for Ace Ltd., Allstate Corp., Chubb Corp., Everest Re Group Ltd., St. Paul Travelers Cos. and XL Capital Ltd.

?This lack of (catastrophic) activity should provide a strong tailwind for underwriting income and book value growth in the quarter and for the year,? Small wrote last week.

But rising competition could put a crimp in earnings, suggested Genio Staranczak, the chief economist for the Property Casualty Insurers Association of America.

He said that the lack of major natural catastrophes boded well for underwriting results during the third quarter, but that increasing price competition and continued weaker investment results could hold profits back a bit.

He noted that the consumer price index for tenants? and household insurance dropped 1.5 percent during the second quarter from last year.

?That suggests to me competition in the marketplace, with insurers cutting prices in order to compete,? which will likely be reflected in third quarter earnings, Staranczak said.

Morgan Stanley analyst William Wilt also sees signs of increasing competition ?fueled by rising capacity and confidence in strength of underwriting? leading to slowing underwriting income. ?Net interest income and reserve releases are increasingly contributing to earnings,? Wilt said. He lowered his outlook on the industry to ?inline? from ?attractive.?

Among reinsurers, the largest of them all, Berkshire Hathaway Inc., stands poised in the third quarter to reap the rewards of going out on a limb and writing mega-catastrophe coverage for other insurers, at much higher rates than in previous years.

Credit Suisse analyst Vinay Misquith increased his earnings estimates on reinsurers after the mild season, but he warned that reinsurers may have some difficulty getting the same lofty prices for January reinsurance contract renewals that they were able to demand before the hurricane season began.

For life insurers, large well-diversified companies, such as Genworth Financial Inc., Prudential Financial Inc., the Hartford Financial Services Group Inc. and MetLife Inc. may surprise on the upside, said Bank of America Securities LLC analyst Tamara K. Kravec on Tuesday.

?For these life insurers, resilience has been the name of the game ? resilience to the flat yield curve and intensifying competition,? she said. ?Moreover, strong equity markets should provide a nice boost to earnings.?

Stronger third-quarter equity markets should help boost both variable-products sales and insurer-investment income.