Moody's Investors Service says in a new report that one positive result of Hurricane Sandy for insurance companies is that the event will likely help support price increases going into 2013.
The Moody's report says the brunt of the losses will likely be borne by State Farm, Allstate, Travelers and Liberty Mutual, an analysis seconded by officials at Fitch Ratings.
The Moody's analysts say that as "large national writers, these companies have diversified exposures and strong capital bases to withstand weather-related volatility."
Moody's says that the property and casualty industry as a whole is currently at a level of relative capital strength, with good risk-adjusted capitalization, moderate financial leverage, and earnings that have benefited from price increases and relatively low weather-related losses through the first three quarters of the year.
"So despite the negative earnings impact of Hurricane Sandy, we expect that large diversified insurance carriers can absorb the negative impact with their capital strength intact," Moody's says.
