Reinsurance prices are expected to rise across the board by as much as 40 percent as a result of Hurricane Katrina, according to industry experts.

At the Rendez Vous in Monte Carlo, one of the world?s most important industry meetings, prices were already rising by between 5 to 35 percent for new business.

But few believe that prices will rise in the same scale as post September 11 or after Hurricane Andrew, with some lines up in triple figures. Some reinsurers have in fact halted writing business and giving quotes, waiting until a clearer idea of what the cost of Katrina will be. At the moment estimates of the cost of Katrina swing between $20 and $60 billion with reinsurers believed to be hit for about half the total bill. Everyone agrees that these figures will change.

?Losses for Katrina are ballooning by the day,? said Miles Trotter, a senior analyst at rating agency A.M. Best.

?Katrina has made the prospect for an uplift in reinsurance rates more realistic.?

Katrina is expected to be the costliest loss ever recorded. It dislodged offshore oil rigs, flattened homes, flooded New Orleans, left hundreds dead and brought commerce on the US Gulf Coast to a standstill when it battered four states on August 29. At Monte Carlo, reinsurers have been meeting with their customers, brokers and insurance companies and have been working out what prices will be for the January renewal season. Around the Place de Casino meetings around small tables at cafes have been where good natured negotiations have been taking place.

In a networking event where thousands of brokers, insurers and reinsurers converge for less than a week, Monte Carlo is traditionally the first place where industry leaders can hammer out pricing trends for the new year.

And as the conference wound down yesterday, the annual Bermuda party got underway at the Jardins des Boulingrins, just off the main square at the Casino, the scene of many deals during the past week. Bermuda delegates donned their shorts and played host to one of the best loved parties of the season. But the reaction to the Bermuda market in relation to Katrina has been varied since executives flocked to Monaco, taking up every available hotel room and swelling the numbers of the principality by 2,000. Some are bullish, saying Bermuda will come out on top. Others predict doom and gloom.

?The headline for reinsurance has been ?The Bermuda Short?,? laughed John Guy, industry stalwart and owner of Editorial Solutions which produces reports and news stories on re/insurance. ?There have been a lot of jokes about IPC Please. All the talk in the market has been about just how much pain Bermuda is suffering. And there is a lot of speculation about who will go to the wall.?

He also says there will be no new Bermuda companies as a result of Katrina, no class of 2005.

?There will be a number of companies falling ? it will all be about market leaders.?

Others say that it will be Lloyds that takes the biggest hit, and in fact Bermuda will come out on top.

On Tuesday Standard & Poor?s said some of the 62 syndicates in the Lloyd?s insurance market could be forced out of business due to losses arising from Hurricane Katrina. While the full impact remains unclear, losses are expected to hit insurers unevenly, leaving exposed some syndicates that have underwritten energy projects and non-marine property.

Isobel McCalman, former editor of Reinsurance magazine and who now works at the rating agency said that Katrina will change the way the industry works in very fundamental ways ? and Bermuda would not follow the normal model and see start ups or an influx of capital.

?A lot of hedge funds lost a lot of money,? she said. ?Therefore capital that might have been available will not be there.?James Veghte, Chief Operating Officer of XL?s Reinsurance Operations and Chief Executive Officer of XL Reinsurance America Inc, who was based in Bermuda for many years, was much more bullish.

?The Bermuda market is perfectly positioned to come out as a market leader,? he said.

And he said that the ramifications from Katrina would reach far beyond the US and would influence re/insurance in the rest of the world.

?There is loads of capital capacity out there,? said Jason Groves, editor of industry publication The Review.

?Companies will take the hit, but they will be fine.?Another industry expert, who asked for his identity not to be revealed, had, however, heard of one group of executives thinking of starting a new Bermuda company following Katrina.

?Change produces change,? he said. ?But to be honest at the moment we are all flying a bit blind. Ask us next month when the figures are more accurate and we will all give you different answers.?