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(From Reinsurance)
Byline: Isobel McCalman, Editor.
The new year finds the reinsurance market wearing a poker face, waiting to see which of the many factors that decide its fortune will fold first.
The Benfield review of the renewals season highlights the fact that there really is not much flexibility for reinsurers as they attempt to keep profitable business in place over the next year.
The tsunami brought to a devastating close to what had already been an exceptional catastrophe year. If the aftermath of it will not have a major financial toll on reinsurers, the impact on its risk appetite will surely be more profound. If any reminder were needed of the requirement for a very thorough understanding of risk exposure and management, then this was it.
A lucky escape
However, the fact remains that reinsurers have come out of the year's exceptional catastrophe losses relatively unscathed so the pressure is again on, despite what the CEOs have been saying, to focus on market share and hot up the competitive environment. Benfield believes there is already evidence that some have failed the discipline test, while others have been able to postpone the choice in order to deal with cat losses.