High storm losses said to hit primary writers.

The higher the insured losses from Hurricane Katrina, the smaller the relative share of those losses property/catastrophe reinsurers will have to bear, according to a new report by the Tillinghast and Reinsurance businesses of Towers Perrin.

While this may sound "weird," it's true, said Amy Bouska, a managing principal of Towers Perrin. "They're definitely going to take on more on the low end of the estimate--significantly more than from the four hurricanes of last year," said Bouska, one of the main editors of the report.

But as the insured loss estimate edges upward, reinsurers will bear a smaller proportion of the losses, primarily because heavily affected insurers will have exceeded their reinsurance protection and will be "out the top," she said.

"This will increase appreciation for high-layer reinsurance," Bouska said. High-layer reinsurance can be more costly, and some insurers don't purchase it because of this.

The report estimates Katrina, a Category 4 storm on the Saffir-Simpson scale when it made landfall in Louisiana, caused $40 billion to $55 billion in insured losses. Insurers will retain 47% to 53% of this loss, based on the report's estimates, and reinsurers will absorb 52% to 44% of the loss, while capital markets get 1% to 3%.