Dear Friend,

Perhaps I’ve gone mad, but I’ve just had a cracking business idea.

Here’s the problem — the global retro market is in meltdown. I’ve just seen an analyst note showing that even Munich Re’s global retro programme is not fully placed and resorting to a high degree of co-reinsurance.

Now if the world’s most diversified reinsurer right at the top of its game can’t get enough cover, what hope is there for the rest of us?

Last week I pointed to anecdotal evidence that the class of 2005 start-ups had been unable to make inroads into this most problematic of classes because of their A minus ratings and lack of track record.

But now I think I’ve found the solution — Lloyd’s. Buyers have got to be happy — you’ve got a 300-year track record, an A rating and an overall solvency position that has improved year on year.

So who’s ready? I’m talking a 30-40% rate on line, with the benefit of a reinstatement, for writing in excess of a Katrina.

Now the latest boffin numbers call Katrina a 1-in-14 year event at worst, so at worst you’re writing a 7% risk for a 30% rate — but don’t forget you’re already sitting in excess of the worst loss ever and you get the first 60% of the loss covered by premium once you’ve taken the reinstatement into account.

And don’t forget that for Gulf of Mexico Marine energy, the underlying is completely transformed from last year — everything is aggregated up and sub-limited down.

This looks like a no-brainer. But the trouble with no-brainers in this business is that they cause you to doubt your sanity — we’ve had too many of these go wrong in the past.

But just because three big storms have hit the Gulf of Mexico oilfields in the last two years, that shouldn’t mask the fact that until then, storms had only very rarely gone that way.

So is anyone thinking what I’m thinking? (Or not thinking enough!)

At least pick up the phone to Rolf Tolle and see if he laughs you out of court – it won’t cost anything to ask.