Underwriting discipline remains: Swiss Re

Despite dire predictions of a return to soft market pricing, experts at Swiss Re’s annual “Economic Insurance Industry Review and Outlook” in New York say companies are maintaining discipline.”Underwriting remains disciplined,” says Patrick Mailloux, head of Swiss Re’s U.S. direct, Americas division. “Industry-wide, capital position is improving but capacity constraints persist, and the hurricane losses from 2004 offset some of the recent efforts in rebuilding capital. Casualty rates remain strong, while property rates have moderated at high levels.”This kind of discipline is necessary in light of the challenges highlighted at the meeting. Among 2005’s goals will be to encourage the U.S. Congress to extend the Terrorism Risk Insurance Act (TRIA) through 2007, says Andreas Beerli, head of Swiss Re’s p&c business in the Americas. This extension, he says, “will allow time for both [Congress and the insurance industry] to study and consider a more long-term approach to this very important issue”.Another challenge will be focusing on better risk modeling techniques in the wake of the four major hurricanes which hit the U.S. coast this year, says Andrew Castaldi, head of catastrophe perils for the Americas division. “Neither the annual losses nor the clustering of events associated with the 2004 season are surprising. They underscore the need for proper evaluation and risk assessment techniques.”