According to a report in the Financial Times, the cost to marine insurers of securing financial protection from reinsurers against catastrophes is set to jump by as much as a quarter.
Though the losses from Sandy are estimated to account for less than a tenth of the $25bn that the storm cost insurers overall, the disaster is expected to prove more costly in absolute terms – a cost that will be an important factor in determining future premiums for consumers and businesses.
The implied leap in costs could further push up costs for shipping organisations, a blow which could be passed on to organisations relying on shipping in their supply chains.
In a report published by Willis Re, the broker says overall global rates are between flat and down 5% as the reinsurance industry remains well-capitalised.
Rates, however, are up about 10% for loss-impaired insurers seeking catastrophe protection for US property exposure, and over twice that for loss-impaired marine insurers, whose catastrophe reinsurance rates are up 20-25%.
