Atlas Magazine October 2009

Crisis exit

A year ago, insurance and reinsurance were at the edge of collapse. The market, which started to loose its leaders, has been shaken by panic.

In September 2008, the American government disbursed 85 billion dollars to bail out AIG, while Swiss Re, a world reference in financial soundness, was drifting away.

A year later, the September 2009 Monte Carlo meeting has gathered “happy” insurers and reinsurers. For most attendees, the nightmare is over. Everything is getting back to normality and the usual bargaining amongst insurers, reinsurers and brokers would resume slowly but surely.

In fact, as we exit the crisis, no partner is willing to impose significant changes in 2010.

Reinsurers will certainly try to press ahead for some price rise which will have hardly any chance to get materialized except for aviation, some third party liability and natural catastrophes covers.

On their part, insurers will advocate tariff cuts while scrambling to impose any rate increases on their clients, especially companies. They will be bound for some reinsurance budget tightening. Hence, the idea of resorting to alternative solutions in the event traditional insurance becomes an unbearable burden.

Finally, status quo is very likely to prevail and a gesture on part of reinsurers shall not be ruled out since no one will benefit from hindering the ongoing economic recovery.

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