Inside view - If you want to win, share your knowledge.

(From Reinsurance)

Byline: Tony Boobier is vice-president of International Solutions at Marshall

According to the World Insurance Forum held recently in Bermuda, seven out of the 10 most highly insured catastrophes have taken place in the past two years. Catastrophes such as Katrina and Rita continue to put pressure on a reinsurance industry that has made underwriting profit in only one year since 1980.

Overall, there is increasing recognition that the status quo cannot be allowed to remain, especially in a world where the apparent effects of global warming seem to be creating more and more major weather events.

In an industry where change is relatively slow, it's clearly time for urgent action.

Some reinsurers are looking at processes; others are looking at the creation of new capital models to help spread risk. It is even being said that the traditional models of property reinsurance are no longer practical. These comments, and others like them, are borne out of genuine concern for a difficult situation. As a global entity, the industry quite rightly searches the global reinsurance community for solutions - but ironically, perhaps, one of the more accessible answers lies much closer to home, in the very books of business that are now being underwritten.

It is hard to overestimate the power of accurate data in calculating risk. The various computer models, a number of which are under review, are considered by many to have been an element in the inaccuracies in forecasting - placing the reinsurance industry under unprecedented pressure. There is increasing recognition that the better the data sets available to populate the models, the better a chance of getting a more realistic result. As one expert reasonably put it, "We can expect losses, but we don't like surprises."