As the implications of Hurricane Katrina start to crystallize, the insurance sector is emerging as one of the hardest hit industries, while the RMBS and non-mortgage ABS sectors have not withstood sharp significant losses as well. Katrina-induced losses to the insurance sector were the steepest in history, more than those suffered from 9/11, Hurricane Andrew or the 1994 Northridge earthquake in California, according to Laura Porter, an analyst at Fitch Ratings.

Interestingly, the reinsurance industry was so tapped out by the end of last year that catastrophe bond issuance spiked, as insurance companies searched for other ways to protect themselves.

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