LONDON (Bloomberg) ? Reinsurance premium rates may see a "modest," fall in 2007 and continue to drop through 2008, following benign storm losses this year, according to a report by Fitch Ratings.

"We believe the market is cyclical," Fitch analyst Chris Waterman said yesterday at a press conference in London. "Overall we expect modest declines."

Record insured losses of $65 billion from the US hurricanes last year led to prices doubling for property coverage in disaster-prone areas in January, said Fitch. Forecasters at Colorado State University have cut back their expectations for the number of hurricanes emerging in this year's hurricane season, which may lead to a reduction in demand for coverage and to oversupply.

Fitch maintained a "stable" outlook on the reinsurance industry, the ratings company said ahead of an annual reinsurance conference in Monte Carlo, Monaco on September 10.

In the past year, reinsurers have raised about $30 billion in equity and debt, mostly offsetting about $34 billion of losses from the US catastrophes, Fitch said.