from the publisher of reinsurance and fac magazines

« Let me be your casualty? | « Main | Happy US Election Day!! »

Reinsurance.....rock solid


Well, as third quarter results have rolled in this week from the reinsurance sector it has been interesting to read the different interpretations of why, in a nutshell, despite the understandable fall in profits, be they operating or otherwise, they will all be solid going forward.

With investment returns squeezed and the likes of hurricanes Ike and Gustav draining the coffers, you might expect rate hardening in both reinsurance and the primary market to be a fait acomplis.

Yet, premiums in the primary market continue to fall in most classes according to not only anecdotal evidence from reinsurance brokers, but that supplied by North American risk managers via the latest RIMS survey.

According to RIMS, there was an 8.5% fall in average property premium in the third quarter whilst general liability fell 9.6% - the largest single quarterly drop since 2005.

It may seem self evident that with the fall-out from the sub-prime crisis, and with global recession looming - or already having started - this can’t go on, but to date, it still is.

The primary market has a reputation for talking a good game, playing up its focus on technical underwriting, and then chasing volume and price regardless. Will the reinsurers do the same come renewals in the New Year? Will they continue to talk a hard market and then drop their trousers at the nearest sign of losing the business?

Well, this is one individual who believes their word should be their bond - so let the games begin.

And now, on with the news....

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

"Welcome to the reinsurance industry’s first dedicated blog!
This is your chance to tell me exactly
what you think of my opinions and voice your thoughts on the issues driving our industry. Make sure you bookmark my blog today!"
Alex Ferguson