Rethink - Ready or not, the storm season's coming!

(From Reinsurance)

June is here, bringing with it sunshine, blue sky, hay fever and the imminent arrival of the 2006 Atlantic hurricane season. Here at Reinsurance, we already have the maps out to see where the next swirling storms are bound, along with a whiteboard to tot up the running total of losses. Clearly, we know how to have fun!

However, this month's Rethink questions were asked in the middle of May, as we tried to get a handle on what you think about the preparedness of the market for the upcoming storm season. Naturally, the first question we had to ask was whether the industry was actually ready for the start of the hurricane season.

The results showed some degree of trepidation, with 57% saying that it was, and 43% saying the opposite.

One reader said: "Few of the class of 2005 have secured the business they were seeking, thus the bulk of any significant losses from hurricanes this year will be borne by those who were also hit last year." Another told us: "Higher retentions, less reinsurance/retro cover will impact net loss negatively after a major event." And a third reader voiced the seemingly prevalent opinion that the industry was only partially ready.

Given the frequency and severity of the past two hurricane seasons, some nervousness is to be expected, and as Reinsurance was looking at the results of the Rethink questions, Typhoon Chanchu was approaching the east coast of China, after appearing ominously early in the Pacific typhoon season.

Still staying with the hurricane season, in our next question we asked if, this time next year, the class of 2005 would be seen as a triumph of optimism over reality. Responses to this question showed a deep division, with 56% saying yes and 44% saying no.