However, the report noted that only three companies?RenaissanceRe, Quanta and PXRE?have reported negative results and only five?RenaissanceRe, Quanta, PXRE, Max Re and AWAC?reported combined ratios higher than 100 during first nine months of this year.

The average combined ratio for the three quarters of 2004 was 95.6, compared to 88.4 for the same period in 2003.

"Strong earnings from previous quarters and profitable non-catastrophe exposed business in the third quarter were sufficient to absorb storm losses," noted Chris Klein, from Benfield Group's Industry Analysis and Research team, which prepared the report. "The lack of damage to balance sheets suggests that a positive or stabilizing effect on pricing is likely to be muted except for directly affected areas."

Looking ahead, the Benfield report forecast that the catastrophe losses experienced in the third quarter, which are already at the top of the historical range, may slow and stabilize the decline in catastrophe pricing. In the short term, however, with reinsurers' balance sheets still intact and robust, rates could still be expected to decline outside the storm-affected regions in the forthcoming renewal season and into 2005.