Peter Allen, partner in Grant Thornton's Financial Markets Group, has said the impact on insurers from weather catastrophes is set to grow.

Allen said: "The frequency and ferocity of weather catastrophes appears to be on the increase, and the impact on insurers will grow as the value of property and businesses on exposed US coasts increases.

"In the short run, this will mean continuing high prices for property insurance and reinsurance globally which means profit for insurers and reinsurers such as Lloyd's, but also increased volatility in their results.

Allen commented on the Lloyd's results earlier today: "Given Hurricane Katrina's size, however, this is a heartening result from Lloyd's. In particular, the fact that there was negligible impact on the Central Fund, shows the value of the recently improved capital adequacy regime."

"The reinsurance market remains unclear on how to price weather catastrophe risk accurately but there is a considerable opportunity for those who can get it right. This requires better catastrophe modelling and a richer understanding of the necessary limitations of these models. It also requires better risk management for insurers. If we can achieve this we will see less cyclicality in the market and therefore better service to the ultimate customer."