AM Best has said the industry could easily pay all of its obligations from Hurricane Katrina should they reach $25bn.
The ratings agency said Katrina is expected to be "one of the most costly catastrophes in US history" and that the magnitude of potential losses may result in some insurers having their ratings lowered.
However, it added that even if there are rating downgrades, "the overall financial strength of the insurance industry will not be significantly weakened relative to year end 2004".