Atlas Magazine October 2012


The traditional September meeting in Monte Carlo provides the main players with good reasons for mixed feelings of hope and concern.

In the absence of major natural catastrophes in 2012, insurers’ main hope is to proceed to the January 1, 2013 renewal of their portfolio at lower rates.

Reinsurers, whose strategy is at a longer term, have completely other concerns. They need to worry about the business environment, which, once more, seems to threaten their economic pattern. Reinsurers believe that the sovereign debt crisis, the slowdown of global markets’ activities and the record low interest rates are major obstacles to overcome before dealing with their customers. A few rate adjustments are also on their agenda.

Since the 2008 financial crisis and that of the subprime, they set the objective of coming back to the fundamentals of insurance and to stick to them to avoid any slipping.

Only good technical results stabilize the market. Unfortunately, in the current context, reinsurers are on the defensive.

Reinsurers, for whom the only way out would be a stabilization of underwriting profits, have their backs to the wall in view of the current, unfortunate course of events. Readjustment efforts are too slow and the current overcapacity has reduced their breathing space, keeping them from maintaining their grip on rates.

In fact the solution is clear. We know what to do. The market needs more discipline. Order at the level of insurers, and especially reinsurers, some of whom, tend to prioritize the short-term approach, even if that meant compromising their own existence.

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