Rethink - Alea's downgrade won't stop you using them, and models can't be trusted.

(From Reinsurance)

Straight into a surprising result - we asked you if you thought that a one-notch downgrade of Alea would stop you from doing business with the firm. After the well-publicised trials of Converium and SCOR, one might have thought that a downgrade below A-grade security might have a significant impact on your buying intentions.

Well, surprise, surprise - the result was a resounding vote of confidence in Alea from the market. Two-thirds of you came in with a resounding "No" to severing contact with Mr Ricciardeli's outfit. Investors, take note - there's value to be had in that Alea brand.

Alea has plenty of friends

Inevitably, we move on to the impact of Hurricane Katrina on the prospects for premium rates going in to the renewal season, and again a few surprises.

The question we asked was, "Will Katrina harden the reinsurance market?" and 22% of you said that it was an event that would raise reinsurance rates across all lines of business, while the overwhelming majority of you (59%) thought that only those with loss-affected exposures would be clobbered, with others escaping lightly. Interestingly, just under a fifth of you thought that rather than increasing rates, Katrina would merely stop rates from falling - almost balancing out the amount of you that saw this as a market-changing event. And it is a very lonely position out in the wilderness if you think that rates are still going to fall - only 2% of you believe that is likely (but you may be cheered by an alternative view on this from Mark ...