Andreas Beerli, Head of Swiss Re’s P/C business in the Americas, speaking at the company’s Year-end Economic and Insurance Industry Review 2003/Outlook 2004 forum in New York yesterday, indicated that continued strong pricing throughout the industry may last at least until 2005.
He noted that the current challenging market conditions represent tremendous opportunities for those companies with both strong balance sheets and underwriting acumen.
“For the insurance industry to perform its function for the capital markets, it must possess adequate capital, and it must assess risks accurately,” Beerli stated. “We are in a period of ‘back to basics,’ in terms of underwriting. The state of the P&C industry only sharpens Swiss Re’s focus on executing our underwriting principles.”
Patrick Mailloux, Head, US Direct, for the Americas Division, added, “Industry-wide, there remains pressure from several factors, including a low interest rate environment and low capital market returns. Strong pricing, or what we call a ‘hard market,’ must continue to allow P&C insurers to return to underwriting profitability.”
Michael Hallett, Vice President of Fox-Pitt, Kelton, also part of Swiss Re, noted that the firm “expects combined ratio improvement in the industry through 2005.”
In the life & health reinsurance arena, Weldon Wilson, CEO of Swiss Re Life & Health America Inc., founds reason for optimism. “The long-term demographics of the aging baby boomer generation is a long term, positive trend for the sector. Those who possess superior product design expertise, and who have a broad view of mortality trends can, in fact, realize success,” he noted.
Giving a broad overview of the US economy, Kurt Karl, Chief US Economist, Swiss Re Economic Research & Consulting, North America, stated: “The outlook right now is quite good. Industrial production continues to rise, consumer spending is strengthening and the investment climate is improving.”
The full presentations from the event, along with information about the speakers and other relevant documents/publications, are available on www.swissre.com. The proceedings are also available via teleconference in the US and Canada at 1 (877) 225-1946, and internationally, at 1 (706) 634-0717. Those calling in should ask for the “Swiss Re Year-end Economic & Insurance Forum.” Additionally, the event will be available through December 17 in the US and Canada at 1 (800) 642-1687, or internationally at 1 (706) 645-9291.
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