Atlas Magazine April 2005

Finance and insurance, a shaky household

Right at the top of world insurance companies, charismatic figures, thought to be untouchable, continue to collapse. Forced resignation, early retirement or mere dismissal, the objective is to reestablish market confidence, even if that means getting rid of elements that are falling short of image and credibility.

This storm at the top of the pyramid, which is shaking AIG, Prudential, Converium and other insurance strongholds, can be interpreted neither as one more episode in the legal series that is shattering the cross-atlantic sector, nor as a casual accident whose victims are leaders lacking results.

Harsh as it is, this event, which spares no executive, regardless of his or her previous merits, is a clear reminder that the market abides by just one rule: results. It is in the name of result dictatorship that we are going to elaborate a new theory of management based on good governance, transparency and other mottos of liberal economy.

Nowadays, insurance professionals are being sacrificed on the altar of profitability by the very same financial markets to which they resorted in the past to develop their businesses.

As a consequence, insurers' fundamental values based on long-term approaches, privileged relationships with customers, proximity, are gone. Henceforth, for financiers, insurance is a product like any other product synonymous with high performance. And, since there is no obvious reason for the creditors' grip to loosen, the insurers will continue in the meantime to pay the bill.

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