Denis Kessler, who recently took over as CEO of France’s SCOR Group, told delegates attending the Les Entretiens de l’Assurance Conference in Paris that the insurance industry would weather the current storms swirling around it, and eventually emerge stronger for the experience.
Kessler, who remains as interim president of the Federation Francaise des Societes d’Assurances, the French insurance industry’s trade group, indicated that he was confident of a return to former profit levels, despite increased reserve requirements due to rising liability estimates stemming from Sept. 11, asbestos, floods and other causes which have coincided with the recent fall in equity values to reduce profit levels and in some cases, as at SCOR, have produced significant losses.
According to a report from Dow Jones Newswires, Kessler stated: “My firm conviction is that insurance will be the greatest economic activity of the 21st century. We’re at the end of the transition now, prices are just returning to normal.”
He emphasized that the industry itself was partly to blame for the problem, as it had priced coverage too cheaply in the past. “We poorly anticipated the brutal cycle change and charged too low rates for the risks we ran,” said Kessler, according to the Dow Jones report. “We need to continually repeat to anyone that will listen that risk has a price, and stop speculating on exceptional financial gains to pull us through.”
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