Hurricane Sandy set to push up insurance premiums next year

HURRICANE Sandy, which lashed the Caribbean and east coast of the US earlier this week, will help push up insurance rates in the affected regions, according to one leading analyst.

Paul Bauer at ratings agency Moody’s said yesterday that “the event will likely help support price increases going into 2013”.

However he insisted that the US property and casualty market “can absorb the negative impact with their capital strength intact”.

Catastrophe modelling firm AIR Worldwide has estimated covered losses at $7bn to $15bn and Bauer expects US primary insurers will pick up most of the bill.

Lloyd’s of London firms do not appear to be facing any major payouts, although the market declined to speculate on the total cost at this stage.

Shares in most of the major US insurers have remained largely stable since Wall Street reopened on Wednesday, as analysts urged investors to show restraint in what is a stable and well-capitalised business.

However it is inevitable that final quarter profits will be affected by payouts.