Superstorm Sandy, which slammed the Northeast and Mid-Atlantic last week, is likely to firm property/casualty insurance rates and lead to tighter terms and conditions, experts say.

The slow-moving, giant storm hit New Jersey the hardest, but heavy rain and, in some cases, record storm surge inundated many locations along the East Coast. Disruptions ranged from New York's subway system to up to three feet of snow in West Virginia. Its effects were felt as far west as Chicago.

Millions of U.S. customers still were without electricity late last week from the storm that caused at least 170 deaths in the Caribbean, United States and Canada.

While analysts said storm-related losses were within insurers' financial ability to absorb them, certain insurers could be hit harder (see related story).

Insured losses were estimated at $10 billion to $20 billion, and economic losses at $30 billion to $50 billion by Oakland, Calif.-based catastrophe modeling firm Eqecat Inc. Boston-based AIR Worldwide Corp. put its insured loss estimate at $7 billion to $15 billion. Both excluded losses borne by the National Flood Insurance Program.

Prolonged power outages in Sandy's wake will slow recovery and repair efforts and delay an accurate reckoning of the storm's toll, said Serge Troeber, New York-based chief underwriting officer at Swiss Re Corporate Solutions.

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“Hurricane Sandy's record storm surge will possibly be a major driver for commercial insurance claims, as these policies typically provide cover for wind, surge and flood,” Mr. Troeber said, noting that the breadth of inland wind damage also would present a challenge and that claims for business interruption would amplify physical damage losses.

“It will take at least a few weeks before we are able to estimate Sandy's full impact due to the magnitude of the event,” he said.

Claire Souch, vice president of model solutions at Newark, Calif.-based catastrophe modeler Risk Management Solutions Inc., said uncertainties surrounding the storm, such as the rate at which power is restored, made a reliable estimate of the total insured losses premature.

“In particular, the speed of restoration of power, and pumping out of floodwaters from towns and transport systems remain major unknowns,” Ms. Souch said in a statement. “Our experience shows that these key variables will play a significant part in the ultimate loss.”

Peter A. Gilbertson, New York-based senior vice president and regional managing director at Wells Fargo Insurance Services Inc., agreed.

“The early estimates are in the range between Hurricane Irene and Hurricane Katrina, but we are not going to have any precision or predictive quality for a long time,” he said. “Suffice it to say insured losses are going to be massive.”

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Finley Harckham, a New York-based shareholder at law firm Anderson Kill & Olick P.C., said apportioning the role of water vs. wind in damages would delay a final determination of losses, as would the complex interrelation of causes that may spur a company to file a contingent business interruption claim.

“The fact that Lower Manhattan was without power creates all types of CBI issues,” Mr. Harckham said. “There are going to be a lot of causation issues as companies look to see which of the time element coverages they might be able to tap into.”

Mr. Gilbertson agreed.

“The lesson is we may have to rethink some of the assumptions about business continuity,” he said. “That's not just in the insurance community, but in all businesses.”

Dan Dick, Dallas-based global head of catastrophe management at reinsurance intermediary Aon Benfield, said he expects insurers to tighten underwriting practices as a result of Sandy, especially concerning water damage and business interruption.

“Sandy is going to force some of the same sublimits and exclusions on the primary insurance side that we saw for policies on the Gulf Coast after Hurricane Katrina,” Mr. Dick said.

Brad Adderley, partner and member of the insurance team of offshore legal and fiduciary and administration firm Appleby, said the storm may alter rates in the Sandy-affected areas.

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“It wouldn't surprise me if we saw the market turning harder and Northeast insurance rates going up,” he said.

Reinsurers may seek higher rates for insurers with Northeast exposures during the upcoming Jan. 1 renewals. “It's an interesting time for negotiations with underwriters, whether or not the storm directly affected you,” Mr. Adderley said.

Conversely, Aon's Mr. Dick said he didn't see the storm “moving the dial” much on reinsurance rates, because insurers likely would bear the bulk of the losses. “I think we are going to see this being a loss that retained well within the insurance industry,” he said. “I don't see this being a big reinsurance event.”

Nonetheless, he said the storm reinforces for individuals and the insurance industry the damage that can be caused by storm surge.

Tim Doggett, Boston-based principal scientist at AIR, said the storm conformed to what the models had projected.

“Sandy was not an aberration,” Mr. Doggett said. “We've seen strong storms come into the Northeast before and expect — in terms of long-term climatology — storms to continue to hit this area.”

Andrew Logan, director of the insurance program at Ceres, a Boston-based nonprofit focused on sustainable development, said insured losses from Sandy should be viewed in the broader context of the overall long-term risk profile for the United States, noting that Sandy arrived during the same year as of one of the most damaging droughts of the past century and catastrophic wild fires.