A quick survey by an analyst unit has found that most reinsurance brokers expect reinsurance rates for catastrophe exposed property coverage to increase with January 1 renewals.

Tamara K. Kravec with Bank of America Equity Research wrote that brokers told them premium rates will continue to rise “significantly” during the January renewal season despite a relatively loss-free 2006.

The rates will be hard in other lines as well, and terms and conditions aren’t expected to loosen after tightening in response to the 2005 hurricanes, Bank of America said.

The analysts said their findings were based on interviews with 17 reinsurance and Lloyd’s brokers representing a broad spectrum of business classes and geographies.

Bank of America said as a result of its research it is reiterating “Buy” ratings on Aspen Insurance Holdings and Axis Capital.

The analysts said phone conversations with brokers had confirmed its earlier thesis for the reinsurance sector foreseeing strong enough conditions in 2007 for reinsurers to write a good volume of profitable business, even through growth rates may slow.

Aspen and Axis, Bank of America found, “are well positioned to take full advantage of the hardest areas of the market.”

Of 12 brokers interviewed concerning the reinsurance property market, six said premium rates at Jan. 1 would rise by 20 percent or more, five said rates generally would rise and one said he expected relatively flat rates, the analysts reported.

Although it is early in the renewal season, Bank of America said several brokers expressed a strong conviction that increases ahead will be of a large magnitude.

Analysts said it was a big surprise that contrary to conventional wisdom that the European market is soft there is “a growing consensus that property rates in certain parts of Europe are actually beginning to stabilize or even to rise.”

However, they said they also found a broad consensus that premium rates elsewhere in Europe were too low and showed no signs of rising.

For its overall view, Bank of America said it has “a cautious view of the reinsurance group. Strong increases on property reinsurance, good underwriting margins on casualty reinsurance and improved risk management should drive book value growth, while valuation multiples could decline due to falling growth rates.”