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(From Reinsurance)
Insurance is an industry unlike others. Insurance prices are not quoted in the financial press, and investors, traders and hedge-fund managers are unable to enter the market, buying the insurance commodity when it is cheap and selling when it is dear.
There is no market in second-hand insurance policies with the result that pricing can continue at uneconomic levels for years, if not decades.
In other industries, traders would intervene to buy the cheap commodity, raising the price to a more economic level.
This in-built inefficiency is the consequence of 18th-century anti-fraud rules that prevent someone without an ...