Atlas Magazine October 2008

Sudden death

September 2008. Monte Carlo. A rendez-vous that is meant to take the reinsurance market pulse, just before the renewal of treaties.

The trend is rather cool. Benfield takeover by Aon and Scor's sound health are about the only topics stirring debate. As for the rest, nothing to declare and absentees have not missed much.

In fact, it is the cyclonic end of the season in the south of the United States that has the concern of the business.

Here we are, one month after Monte Carlo, a terrible cataclysm is ravaging world finances. Even worse than Gustav, Hanna and Ike combined; a tornado of unprecedented scale has swept AIG, the world's number one insurance company.

Staggered analysts are wondering. How could this have happened? How can one explain a crisis that shatters in a week's time the most powerful bankers, the world's biggest insurer bringing to ashes huge sums, ruining insurers' finances and the savings of millions of wage earners, sending shockwaves throughout the world and causing a climate of generalized mistrust towards a banking system left in the hands of wizard operating on the stock market?

How can we also account for the inaction of the rating agencies which have always assessed the markets' soundness?

Now that the crisis has become widespread, who is able to resist its groundswell?

Being in the forefront, banks are falling apart pulling along insurers and reinsurers.

In an effort to stop the hemorrhage, in the hotbed of ultra liberalism, the conservative government of United States has proceeded to the nationalization of creeping companies. It is high time we set philosophical considerations aside and put an end to chaotic markets.

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