A panel assembled for the annual Swiss Re U.S. Insurance/Reinsurance Industry Forum March 13 in New York City noted that the next 18 months will offer numerous challenges to the industry.
The analysis concluded that both businesses and consumers will be studying closely their present coverages, taking an extended look at value versus cost.
Jacques Dubois, Chairman, President and CEO of Swiss Re America Holding Group, commented to look for changes in the industry’s joint approach for doing business and managing risk moving forward.
Along with Dubois, other Swiss Re panelists who contributed were Werner Schaad, Chief Risk & Reinsurance Officer, Swiss Re (US); Thomas Streiff, Head, Group Sustainability Management, and Mark Lescault, Chief Underwriting Officer, Swiss Re Americas. The speakers’ entire presentations are at www.swissre.com.
Among the key findings presented were:
While natural disaster losses declined in 2001 from $14 billion to $10 billion around the world, property and business interruption losses from man-made disasters dramatically increased from $5.9 billion to $25 billion.
The Catastrophe Reinsurance Premium index rose 25 percent during the current 2002 renewal season. Swiss Re forecasts this hardening will last several years.
Despite the more than $20 billion of a targeted $31 billion raised by insurers and reinsurers since Sept. 11, the influx of capital does not cover the more than $100 billion capacity loss taken out of the markets.
Industry-wide primary company renewal trends for 2002 include: Property, non-catastrophe up 10 percent; Property catastrophe up 5 percent – 20 percent, Liability up 10 percent to 40 percent; Auto up 10 percent – 20 percent, and Workers’ Compensation up 10 percent to 15 percent.
The environment will be more of a concern for the industry as water and air pollution, together with antiquated capital, may lead to major losses.
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