Industry Leaders Say They Are Concerned About Recovery
The leading concern of global insurance executives is recovery from adverse political, economic and market conditions, according to a survey of attendees at the annual seminar of the International Insurance Society.
Other top concerns were meeting customer demands; managing risk on existing and new liabilities; maintaining competitive pricing with adequate profitability; and productivity, improved operational efficiency. These were responses rated number one most often from all participants, who amounted to 6% of total registrants at the annual IIS seminar last month.
Discussing this years number one concern about adverse political, economic and market conditions, Brian OHara, chairman of XL Capital in Bermuda, said this relates in part to the “overhang of the Iraq war.”
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Other “overhangs” have created a lot of fear and uncertainty, such as the economy, investment returns and the U.S. tort problem, he indicated.
Further, the bubble of the 1990s and its collapse affected “the insurance and reinsurance industry in a very profound way both coming and going,” he said during a press conference to discuss the results of the survey.
“The [investment] returns from the period caused behavior to be such that underwriting practices really went very awry,” he said.
“The collapse of the bubble not only devastated balance sheets in terms of economic losses on investment portfolio but also created a whole new wave of underwriting losses,” he said, citing the example of professional liability–directors and officers and errors and omissions covers on banks.