Unlike past storm events, the heaviest impact of Hurricanes Katrina and Rita will be on commercial business, according to a report from Marsh brokerage.

The study also said that reinsurance rates will drive increases in a number of lines.

"Whether Hurricane Katrina, by itself, will represent the largest insured loss event in history remains to be seen," said George F. Mikes, a managing director of Marsh Inc. and chief operating officer, North American Risk Practices & Specialties, in a statement.

He said the storms of 2005 "have sounded an alarm that many are heeding."

Typically, most of the losses from a hurricane are sustained by personal lines insurers on the property side, the report points out. But in this case, a substantial number of claims will be on the commercial side. The report says 70,000 businesses in 10 Louisiana parishes were damaged by Katrina, affecting myriad insurance lines.

Also heavily affected were the marine and energy lines, which at one point saw 80 percent energy production out of the Gulf of Mexico shut down due to the storms.

The 42-page report noted that businesses, while still putting together their claims reports, are facing double-digit increases on renewal. Businesses that did not suffer losses are seeing greater scrutiny from insurers over their catastrophe exposures.

"Rather than looking at the prospect of further reductions in their property rates, businesses will more likely be looking at increases," the report states.

Insurers in giving quotes for new and renewal business are taking longer for the process, the report said. Carriers want more detailed exposure information and are watching the marketplace to see what it does before committing to price and capacity.

Marsh said, "Some insurers are insisting on 'Best Terms'--meaning each insurance market in any one layer receives the same price--necessitating the replacement of these insurance markets where clients have elected not to permit 'Best Terms.'"

According to Marsh's study, a few reinsurers have "completely withdrawn" from the North American property marketplace. It added that many "insurers and reinsurers" are restricting their catastrophe capacity and committing it to only one risk.

"Overall though, adequate capacity, even for catastrophe exposures, is still generally available--albeit at an increased price," the report said.

Insurers were also found by Marsh to be dealing with the consequences of their lost faith in the current catastrophe models and looking for new models that would more closely mirror the realities they are now facing.

For the insurance buyer, the report suggests strategies for purchasing insurance, including being prepared to sell the risk to insurers at the time of renewal.

A complete copy of the report, titled "The Impact of Nature: The Aftermath of Hurricanes Katrina and Rita," is available at http://solutions.marsh.com/hurricanes.

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