Last year, Hurricanes Dean and Felix smashed into Mexico's Yucatan peninsula and Nicaragua. They were category five storms - the most powerful and devastating - marking the first time since at least 1851 that two hurricanes of such size came ashore in the Atlantic basin, according to Fitch Ratings.

The insurance industry barely blinked. Catastrophe losses totaled $6.5 billion last year, the eighth lowest in a decade, partly because Dean and Felix struck thinly populated areas where little coverage is purchased. That followed 2006, when catastrophe losses were similarly low at $9 billion. Industry profits and surplus - a measure of money and other assets available to pay claims - climbed strongly in those years.

That is a far cry from 2005, when the industry suffered record catastrophe losses of more than $50 billion after Hurricane Katrina devastated New Orleans. Insurers pulled back from storm-prone areas, catastrophe reinsurance prices surged and more homeowners were forced to buy coverage from state-run programs such as Florida's Citizens Property Insurance Co.

But the profitable experience of the past two years has begun to test the industry's memory. With lots of spare cash and a desire to put that money to work backing risks, some insurers have begun to write new business again in storm-prone areas.

That is despite the ever-present danger that the next hurricane season could cause devastating losses on the scale of 2005. Last year's monster hurricanes show the potential for such damage.

"Hurricane Dean and Felix were huge storms, but they didn't reach the US so people didn't pay attention to them," Donald Thorpe, senior director at Fitch, said in an interview. "If just one of those two had hit Miami it would have caused bigger losses than Katrina."

This year's hurricane season, which begins June 1, is expected to be slightly above average.

The National Oceanic and Atmospheric Administration, which tracks such things, is forecasting six to nine hurricanes in the Atlantic basin.

Two to five of those will be major hurricanes.

That's above the long-term average of six hurricanes and two major hurricanes, according to Fitch.

Despite such ominous forecasts, insurance prices in catastrophe-prone areas continue to decline, Fitch's Thorpe notes.

In the past 12 months, insurers have begun selling storm coverage in hurricane-prone areas of the US that they were avoiding a year before, according to a recent survey by the Council of Insurance Agents and Brokers.

Even in the risky Florida insurance market coverage to protect against storms has become easier to buy, either from private insurers or from state-run Citizens, the CIAB poll found.

That is a direct result of the previous two years when no big hurricanes struck the US, despite forecasts that each season was going to be more active than normal, Thorpe explained.

"These trends indicate that the industry's eagerness to deploy capital surplus is outweighing concerns about the near-term forecast for heightened levels of US windstorm activity," he warned.

Still, the industry is financially stronger than it was two years ago, according to Richard Attanasio, an analyst at AM Best, an influential industry rating agency.

The US property and casualty insurance industry had a policyholder surplus of $527.5 billion at the end of 2007, up 7.1 percent from a year earlier. That surplus grew 12.6 percent to $492.8 billion in 2006, AM Best data show.