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Changes to Underwriting, Rather Than Pricing, May Be Sandy's Legacy

Just as it altered the New Jersey shoreline, Superstorm Sandy has altered underwriting, but commercial-property pricing may not increase as much as one might expect.

By Phil Gusman | Updated on April 11, 2013

Superstorm Sandy may have put a dent in the insurance industry’s reversal of fortunes after a catastrophe-filled 2011, but commercial-property pricing may not increase as much as one might expect after the second-most damaging named storm to hit the U.S., a new report says.

In its “Marketplace Realities 2013 Spring Update,” insurance broker Willis says capacity remains abundant even for catastrophe perils. “Even with Sandy,” says Willis, “property losses totaled $65 billion in 2012, a 44 percent improvement over 2011‘s total, and the P&C insurance market saw policyholder surplus increase from $550 billion in 2011 to $570 billion in 2012.”

The market, the broker continues, was well capitalized to absorb 2012’s losses. 

Willis expects capacity to remain abundant in 2013, and while new capacity has not entered the market this year, the property space has not contracted.

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