Katrina losses attract investors who see substantial rates rises
The insurance industry is poised to receive an influx of new capital in the wake of Hurriance Katrina.
Insurers said that the disaster was expected to halt the slide in premiums, with rates in some classes expected to rise by 50%.
Benfield chief executive Grahame Chilton said: "There is no doubt there will be plenty of contingent capital coming into the market moving forward. After any major loss there is always interested capital, they may see this [Hurricane Katrina] as an opportunity to enter the market."
He added: "Companies will be waiting to see where capital is most eroded, so they are best able to place their capital. This is likely to be either Lloyd's, Bermuda or Europe - but most likely Lloyd's."
Kiln executive director, underwriting, Robert Chase said the insurer was going through a re-evaulation of rates post Hurricane Katrina, with rates expected to increase by 12.5% "across the board".
He said prior to Hurricane Katrina rates were expected to decline by 7% by the next renewal period.
He said the biggest rise will be seen in US offshore energy where rates are predicted to rise by 50% in the next 12 months. US retrocession business and US catastrophe reinsurance rates could rise by up to 25%, he said.
Meanwhile Hiscox said it had reversed its decision to cut the amount of business the company will write next year because of the effects of hurricane Katrina. Robert Hiscox, chairman, said: "As always, after a disaster, come opportunities. Reinsurance rates are definitely going up."
