Property and casualty (P&C) prices are poised to rise next year as the industry deals with huge catastrophe losses suffered in recent months, according to Swiss Re.

Global premiums will probably increase at least 3% next year and in 2019, the reinsurer says in its latest review and outlook report.

Improved economic conditions worldwide will support the premium growth.

“Price rises in loss-affected segments are already happening and could be substantial,” Chief Economist Kurt Karl said.

“The ultimate volume of losses is not yet known, but appears to be large enough to cause price increases beyond the affected sectors. This is also happening because prices have fallen so low over the past few years.”

P&C sector capital has been drained significantly by hurricanes in the US and Caribbean, earthquakes in Mexico and California wildfires.

Estimated insured losses from the hurricanes and quakes are about $US95 billion ($124.62 billion) and this will severely affect insurer and reinsurer underwriting results.

Swiss Re says the US P&C combined operating ratio will deteriorate to 109% this year from 101% last year.

The global reinsurance industry’s combined operating ratio will blow out to 115% from 92%, assuming there are no large catastrophes in the next few weeks.