Hampden Agencies, Lloyd's largest members' agent, has published its report for private investors on what it describes as the "market-changing Katrina and Rita effect".
Hampden's report, which also gives market expectations from brokers, underwriters and competitors, outlined five key issues that affect high-net-worth investors in the Lloyd's market.
1. The "Katrina & Rita effect" has fundamentally changed the market.
2. Profit outlook for 2006 has been upgraded substantially, to 10% to 15% of underwriting capacity (from its previous range of 5% to 7.5%).
3. Hampden expects premiums to continue to increase throughout 2006.
4. Hampden expects the amount of capital made available to syndicates by private investors to increase by 4.1% in 2006 – before the hurricanes, this figure was expected to fall by 10%.
5. Pricing discipline will help maintain a bright outlook for private investors in 2006. Hampden expects underwriters to be increasingly risk-averse following pressure to make profit in a climate of low rates and high reinsurance costs.
Nigel Hanbury, chief executive of Hampden Agencies, said: "Now that we have more concrete information available, it is important that investors know what market expectations are at every level.
"Our research shows that the effects of the catastrophes of 2005 should be seen as the beginning of a complete shift in the market. Pricing discipline in 2006 will provide investors with a level of comfort and we are confident that we will continue to see significant interest from new investors."