The insurance industry likely will weather the financial ramifications of Superstorm Sandy in the long term, but analysts say there will be short-term challenges.

“The storm will not be a capital issue for most insurers,” Adam Klauber, Chicago-based analyst for William Blair & Co. L.L.C., said in a statement. “In the toughest scenario, the loss for insurers in our coverage universe will likely be limited to between one half to a full quarter worth of earnings.”

While Sandy-related losses are not likely to result in systemic price increases, Mr. Klauber said they could well affect insurance and reinsurance prices in the Northeast.

“This is the second large event in two years,” he said in referring to 2011's Hurricane Irene. That will “make it less attractive to write homeowners or commercial property in these areas. As a result, we expect prices for many property-related coverages in affected areas to be up in 2013.”

Likewise, Dan Farrell, New York-based senior research analyst at Sterne Agee Group Inc., said Sandy may cause incremental pricing increases.

“In lines such as homeowners and commercial property insurance, where pricing has been increasing in the mid- to high single-digit range, the current momentum could continue longer than it would have previously,” Mr. Farrell said in a statement. “Additionally, to the extent that losses do flow into the reinsurance lines, property cat reinsurance rates, which in our view would likely have declined at Jan. 1, may decline at a slower pace.”

In a research note, New York-based Moody's Investor Service Inc. said that while Sandy dashed the property/casualty industry's hope for a quiet end to the year and will negatively affect earnings in the coming financial quarters, the industry has sufficient capital strength to absorb the losses.

“The P&C industry as a whole is currently at a level of relative capital strength, with good risk-adjusted capitalization, moderate financial leverage, and earnings that have benefited from price increases and relatively low weather-related losses through the first three quarters of the year,” Moody's said. “In addition, the event will likely help support price increases going into 2013.”

Likewise, New York-based Standard & Poor's Ratings Services said in a statement that it expects Sandy to have a limited impact on the long-term ratings of U.S. property/casualty insurers, but said the losses were indeed material.

“It is widely expected that Hurricane Sandy will inflict more severe losses than Hurricane Irene, which struck the U.S. East Coast in August 2011, and cost the industry $4 billion and $5 billion,” S&P said in a statement.