Hiscox has reversed its decision to cut the amount of business the company will write next year because the effects of hurricane Katrina will stop the slide in premium rates.

Robert Hiscox, chairman, said: "As always, after disaster, come opportunities. Reinsurance rates are definitely going up."

Hiscox has kept to its £55m estimate of net losses but has said that these could be absorbed by a business in which underwriting was still healthily profitable.

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