Sandy stings marine insurers - FT.com Marine insurers have emerged as big losers from the crucial round of new year reinsurance price negotiations after they took a disproportionately large hit from superstorm Sandy, brokers have warned. While other types of insurers are set to enjoy flat premiums or even declines, the cost to marine insurers of securing financial protection from reinsurers against catastrophes is to jump by as much as a quarter. The global insurance industry is winding up negotiations today over the terms of annual reinsurance policies worth about two-thirds of overall premium value. The prices of "insurance for insurers" are important in determining future premiums for consumers and businesses. Although their losses from Sandy are estimated to account for less than a 10th of the $25bn that the storm cost insurers overall, the disaster is nevertheless expected to become the costliest catastrophe for marine insurers in absolute terms. Sandy destroyed high-value pleasure craft and commercial vessels as well as cargo such as imported cars when it hit the north east of the US, causing marine insurance costs of at least $2bn. Reinsurers are also successfully demanding marine rate rises because of the Costa Concordia disaster. The cruise ship ran aground off the coast of Italy at the start of the year, one of the costliest ever marine accidents with estimated losses of $1bn. In a report published today, the broker Willis Re says overall global rates are between flat and down 5 per cent as the reinsurance industry remains well capitalised, keeping the market competitive. Even after Sandy, insurers are facing little more than half of the $120bn losses from global disasters that they endured the previous year. For most lines of insurance, only underwriters that are "loss impaired" - those that endured losses high enough to trigger reinsurance payouts - are facing rate increases. Rates are up about 10 per cent for loss-impaired insurers seeking catastrophe protection for US property exposure after Sandy devastated homes, vehicles and businesses. Yet this is less than half of the rise for loss-impaired marine insurers, whose catastrophe reinsurance rates are up 20-25 per cent, Willis Re said. Moreover, even those marine insurers that avoided exposure either to Sandy or the Costa Concordia are still facing rises of 15-20 per cent. With the Costa Concordia disaster and Sandy both striking in 2012, Willis said marine insurance had suffered "one of its worst underwriting years in recent history." James Vickers, chairman of Willis Re International, said Sandy had a big impact on marine compared with some other types of insurance because of its smaller premium base.