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Toddlers on chairs

I love this industry like a father and I am a father of three — one five-year-old boy and twin three-year-old girls.

Lately I’ve been noticing what remarkable things becoming a parent can do to one’s powers of prediction.

Being a dad means I have developed the amazing ability to see into the immediate future. These days I am a veritable sage:

“Daddy, can I have some of your beer?”

“No — you won’t like it!”

Or “Get down from that chair”


“Because you’ll fall off and bang your head”

I can see into the future with the clarity of a soothsayer, and often have the satisfaction of being able to say “I told you so”. (Although the worth of knowing one is right diminishes somewhat when it involves comforting a screaming infant who has just had a head-on collision with a stone floor).

Since arriving as editor here 18 months ago I have extended my gift of concerned parental clairvoyance to the reinsurance market. I can’t always say that the clarity is as good as with my kids, but it hasn’t been too wide of the mark so far.

But that is actually the point — it takes no special gift to see that a three-year-old jumping up and down on a chair is going to fall off sooner or later. When I tell my daughter to sit down before she falls off I’m not really looking into the future — I’m merely stating an obvious fact.

Similarly it is also obvious to most people that reinsurance pricing moves in cycles and not in straight lines. If you accept this premise, at the top of a cycle you should metaphorically climb down from your chair, sit sensibly, behave yourself and wait for the next upturn to come.

But such a premise assumes that people and markets always behave rationally — and our experience suggests that they don’t. At the peak of any pricing cycle there are usually plenty of people telling you that something has changed fundamentally and that the whole dreaded process has been consigned to the scrapheap of history. Either that or people convince themselves that the profitable part of the cycle still has a lot further to run before they start losing serious money.

Such people are toddlers jumping on chairs – and the funny thing is that like small children, they have extremely short memories.

At such times it always pays to rely on what you can see with your own eyes as opposed to what you are being fed. And at the moment across non-Cat exposed US property and casualty classes prices are coming off 10% 20% or 30% over this time last year, and even the burnt out Cat rate rises seem to be reaching a peak.

That is all the analysis you need – this IS a softening market and it’s going to get an awful lot softer. In short — it’s time to climb down from the chair.

Kids, like reinsurers — you have to love them. I’ll leave you with another blast from one of my three:

Does this remind you of anyone?

“Get off the chair”


“Because yesterday you fell off and hurt your head. We had to take you to hospital”

“But I’m not going to fall off this time!”

Comments (1)


Hello Mark,

Good to see that you can read the new blog on a blackberry. It might be too much scrolling for some but works for me!

Regards Henry

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