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Reinsurance contracts that begin at the start of the Florida hurricane season next week will cost their buyers about 15% more than the same coverage last year, according to price tracking by Guy Carpenter, the reinsurance brokerage of Marsh & McLennan Cos. (MMC)

During a conference call Thursday, Guy Carpenter executive vice president Kevin Stokes said the amount of current reinsurance capacity is down 15% from the levels at the same time last year.

Primary insurers buy reinsurance to cover some of their own losses from a catastrophe.

Typically, the biggest property losses in the U.S. are caused along the coasts from storms that hit during the hurricane season that begins in June and runs until November.

In 2008, Hurricane Ike hit the western Gulf Coast off Texas and caused major damage to oil production, shutting down two-thirds of off-shore oil production, said Bertil Olsson, energy leader for Marsh's U.S. energy, mining and power practice. He said 8% is still shut down and undergoing repair.

"If there is no major storm in 2009, everyone will be okay, but if there is a major storm" it will put a squeeze on customers, who may find themselves unable to afford the higher expected prices for reinsurance, Olsson said.

He said insurance capacity is down in the area, and prices have risen at least 20%.

-By Lavonne Kuykendall, Dow Jones Newswires; (312) 750 4141; lavonne.kuykendall@dowjones.com