SAN DIEGO—Surplus lines insurers are finding that their property exposures are uncomfortably larger under a revised catastrophe model, and some are considering whether to shrink availability or adjust their capital to cover the additional risk.

Insurers and brokers at the National Assn. of Professional Surplus Lines Offices Ltd.'s annual conference in San Diego last week said Risk Management Solutions Inc.'s Version 11 Atlantic hurricane model—which increases potential inland damage from hurricanes, among other changes—is causing companies to rethink how they underwrite windstorm exposures.

“Whatever (probable maximum loss) position you were in prior, you are in a significantly higher position if you write exposed property,” said Mario P. Vitale, president of the U.S. insurance operations of Hamilton, Bermuda-based Aspen Insurance Holdings Ltd.

Insurers that find themselves with inadequate capital because of the revised model by the Newark, Calif.-based RMS will have to dedicate more to their catastrophe business, he said. “To the extent that there was excess capital, it will now be depleted.”

Insurers with adequate capital across their books of business will have to shift some to their property catastrophe exposures, Mr. Vitale said. The only remaining option would be to reduce catastrophe underwriting, he said.

Partly in response to changes in the model, Aspen CEO Christopher O'Kane said in a July earnings call that the insurer has reduced the amount of its limits exposed to U.S. windstorm risks by more than $100 million.

“A lot of carriers are struggling with the impact of RMS 11 and the ramifications on their ability to write in windstorm areas,” said Judy Patterson, Boston-based head of surplus lines U.S. property underwriting at Beazley Group P.L.C.

The model's impact on insurers “varies widely, depending on the nature of the portfolio” of property risks, said Ms. Patterson. “But there is a significant increase in the modeled loss on the Gulf Coast, particularly in Texas.”

J.C. Sparling, executive vp of the Preferred Brokerage unit of Preferred Concepts L.L.C. in Atlanta, said the model is “particularly punitive” in the area around Houston, where the modeled losses are significantly higher than previously thought, creating an “aggregation issue” for some insurers.

The revised model takes into account hurricane behavior not previously modeled, sources said.

Hurricane Ike, which made landfall around Galveston, Texas, in 2008, showed that the storms don't always disperse quickly when reaching land, Mr. Sparling said. “Ike slammed into Texas and kept going,” causing losses far north of the coast, he said, and changing the way hurricanes would be modeled going forward.

The new RMS model has thwarted some insurers' attempts to distance themselves from coastal risks.

Crum & Forster Inc. has had a longstanding policy of not writing property coverage within 1 mile of a coastline, said Douglas M. Libby, CEO of the Morristown, N.J., insurer. Under the revised model, property much farther inland is treated much the same as that along the coast.

“So we are in the process of rethinking that strategy,” Mr. Libby said of Crum & Forster's underwriting approach. “We haven't decided what that will be yet.”

Sources say the new catastrophe model is one of several drivers of what could be a slowly hardening market.

“There isn't one single thing that points to a hardening market,” said Mr. Sparling. The RMS model, though, “is clearly one of them.”

“For a long period, rates have been depressed,” said Colin Bird, CEO of Besso Insurance Group Ltd., a London-based broker. “Couple that with traditional markets entering lines that surplus lines brokers have been involved with,” he said, and unless there's a market-changing event such as a major hurricane, the marketplace may not look drastically different for some time.

One wild card for insurers of all sorts, though, is their exposure to sovereign debt of countries that have had, or could have, their ratings downgraded, Mr. Bird said. Companies that hold that debt as security against their capital could find themselves with problems, depending on how some of the economic and political turmoil plays out, he said.

“That could be a bigger issue,” Mr. Bird said, “than any God-made catastrophe.”