Hurricane Katrina losses could be $20bn less than originally estimated, according to Standard & Poor's (S&P).

Simon Marshall, S&P sector specialist for European reinsurance, said the general industry consensus was that losses could range between $40bn and $45bn.

Early industry speculation tipped initial losses as high as $60bn, but Marshall said the estimates probably did not account for the US government subsidy for flood damage.

But he said he would not be surprised if the estimates increased.

He added that firms would be able to quantify the extent of the loss with some level of certainty by December once the hurricane season had ended.

Meanwhile, a new storm, Wilma, is set to reach category three as it enters the Atlantic basin.