SAN FRANCISCO (Dow Jones) ? ACE Ltd. and Everest Re Group Ltd. were upgraded on Friday by a Wachovia Securities analyst who expects the insurance and reinsurance companies to benefit from rising prices in the wake of Hurricane Katrina and other recent storms.

Wachovia?s Susan Spivak lifted her rating on both companies to outperform from market perform and said in a note to clients that the two stocks could rise by at least 15 percent from current levels.

Shares of ACE, Bermuda, closed up $1.41 or almost three percent to $50.14 on Friday, while Everest Re increased $2.52, or almost three percent, to $92.55.

Katrina smashed into Louisiana, Alabama and Mississippi on August 29, causing widespread damage that could end up costing the insurance industry more than $30 billion.

Hurricane Rita hit the Gulf Coast less than a month later, handing insurers more losses, and now Wilma, another hurricane, is forecast to hit Florida in a few days.

There are already signs that the storms have pushed up the price of property coverage.

Insurers, reinsurers and brokers are meeting later this month at the annual Baden-Baden conference in Germany where reinsurance renewals are negotiated. The extent of price increases should become clearer after the meeting.

?Ace and Everest Re are both well-capitalised, diversified companies that should be two of the primary beneficiaries of rate increases,? analyst Spivak said.

Also on Friday, Allstate Corp. got a boost after Merrill Lynch analyst Jay Cohen upgraded shares of the second-largest property and casualty insurer to buy from hold.