Dear friend,

The ink is drying on another renewal season and the picture is as patchy and fragmented as I predicted before the end of the year. Rates are up and conditions are tight in all the obvious and logical places they should be up and tight, but are going nowhere or increasing minimally in non-loss-affected lines.

At the end of the year I had a little chat with myself about what indicator I would use to define for myself whether we were in a proper hard market.

The barometer I eventually settled on was the Spanish market.

Of course this is a market I know extremely well, being the bearer of over seven years’ worth of scars to prove it. But the Iberian market is a good bellwether because the Government-backed “Consorcio” strips out natural catastrophes and terrorism, which makes it as uncorrelated with the Gulf of Mexico as is possible to contrive.

The Spanish market is also extremely competitive — so I thought that if reinsurers could force up prices here, they could force them up anywhere.

And the result? My Spanish barometer is calling a no-score draw — a dead heat. It’s renewal as expiry and everyone’s happy (for the time being at least).

So if a “rising tide” fails to lift all ships, then surely the logical conclusion is that the tide in question is not, in fact “rising”— which is a roundabout way of saying that we don’t have a proper hard market on our hands.

The whole situation reminds me of my six-monthly check-ups at the dentist as a young child. My older brother and I always used to go along together in an odd-ball pairing. I had been blessed with healthy teeth and his were pretty awful.

The dentist always asked the slightly sinister question “who’s going first?” with a bloodthirsty glint in his eye. I always put up my hand immediately and my brother always pretended not to hear him, wondering if he could make a bolt for the door before my mother caught him.

Two minutes later, when the dentist was finished admiring my pristine gnashers and I was given the all clear, I would always sidle up to my brother, summoning up my most irritatingly smug tone of voice and say “No fillings for me” as he turned increasingly pale.

Well, it’s no fillings for Marcos, or Pedro, or Pepe.

Pah — Katrina — that didn’t hurt!