Rethink - Getting inside the mind of reinsurance.

(From Reinsurance)

Which issues are being mulled over and argued about by the global reinsurance industry? That's the question that we address in our rethink column about the major issues of the day. Once a fortnight, we ask the industry about the latest news and views on recent events. The first results in this month's edition come from a survey that we carried out toward the end of July.

How much has the early start to the hurricane season worried you?

We asked this question in the wake of the steady stream of tropical storms and hurricanes that appeared in the Atlantic during July, and which caused many meteorological prediction agencies to upgrade and increase their storm forecasts for the Atlantic. The question divided you equally. Although 40% of readers said that they were reasonably worried, an equal 40% also said that they weren't much worried. An additional 6.7% said that they were very worried and 13.3% said that they weren't worried at all.

Which statement do you think most closely matches your view on ratings agencies?

This was another question that divided readers almost equally, albeit cautiously. Respondents were asked to pick which of a series of statements they agreed with. The results were that 10% said they had a positive view of ratings agencies and that the market couldn't function efficiently without them; 33.3% were less enthusiastic, saying that they were generally positive, but that it was hard to see how ratings agencies could justify their massive profit margins; 20% were entirely neutral, saying that if the market didn't have them, then someone would have to invent them.

However, 33.3% said that they were suspicious, as they wielded too much power, have large conflicts of interest and answer to no regulator. Just 3.3% of readers said that ratings agencies were superfluous since the new tide of international regulation is making them obsolete. And no-one ticked the option that said their views were negative, that ratings agencies were parasitical organisations that feed on the industry without adding value. One reader commented: "Over the many years of observation, there have been many 'rated' insurers that collapsed. So where were the raters then?"