Hurricane Sandy: underwriters and brokers split over rate trajectory

A division is emerging between underwriters and brokers over what affect Hurricane Sandy will have on rates.

In an interim management statement, Amlin said it expected catastrophe reinsurance pricing to remain strong, with Hurricane Sandy helping to limit downward pressure. It also said 80 percent of its portfolio had enjoyed rate increased in the ten months to October 31 with average increases of 3.8 percent.

Many brokers, however, are more cautious on potential rate rises pointing out that record capital levels in the industry will dampen increases.

“There's supply in excess of demand,” said Bryon Ehrhart, chief strategy officer at reinsurance broker Aon Benfield. Others, such as Andrew Hinds, director of reinsurance at broker Besso, argue it is natural for carriers to want to talk up rates.