Although the estimated $25 million in losses from Superstorm Sandy is not pushing up the price of property-catastrophe insurance, it has brought concerns about future cat losses and current modeling techniques, according to the Spring 2013 State of the Market Report by wholesale broker NAPCO.

Global cat losses reached a total of $65 billion in 2012, down from a high of $119 billion in 2011, according to the report, which combines broker insight with an analysis of leading property-casualty indicators. And despite Sandy's impact in fourth-quarter 2012, losses were only about 5 percent of policyholder surplus and barely made a dent in the industry's underwriting capacity. In early 2013, prices were flat to up 10 percent on accounts that were not loss impaired. If catastrophe losses stay low, insurers may face increasing pressure to reduce prices to put that capital to work, said NAPCO President David Pagoumian.

Among the findings:

• The frame habitational market is in disarray, with insurers exiting the market and the price of insurance up as much as 50 to 100 percent in the Midwest.
• The definition of Tier I windstorm counties may expand up to the coast of Maine.
• The flood insurance market is attracting increased activity because of flooding in areas not considered high-risk zones.

Download the full Spring 2013 State of the Market Report at http://bit.ly/SOTMspring2013 (PDF) for expanded Sandy analysis and placement considerations.