Is it just me who thinks Monte Carlo is one of the more bizarre places in the world?
Last year marked my initiation into the Rendez-Vous de Septembre, the reinsurance industry's biggest and longest-running conference (with next year marking its 50th anniversary), and its weird and wonderful backdrop.
Despite having lived in the Far East and travelled fairly extensively, everything I witnessed in Monte Carlo felt extremely foreign in an almost otherworldly way. From the posers in their flash cars with pneumatically-enhanced girlfriends in tow (who seemed to spend the entire day circling the roads around Casino Square), to the immaculate policemen with their impenetrable sunglasses and expressions, to the overwhelming old-school grandeur, all intermingled with the kind of extreme bad taste only money can buy.
Also bizarre was swigging champagne at the Rendez-Vous' many glitzy cocktail parties while discussing the latest news on Hurricane Katrina. This was during the immediate aftermath; each day the death toll and insured loss estimates were increasing and we were only just getting a true sense of the chaos in New Orleans. While this did seem incongruous, I was also aware that the Rendez-Vous signifies a great deal more than its extravagant location would suggest.
The power of relationships
Sit in Monte Carlo's Cafe de Paris for long enough and you witness a large-scale version of musical chairs. It is one of the few opportunities for reinsurers, brokers and clients to sit face-to-face across a table to either establish or reinforce a relationship. Every half hour or so meetings come to an end, people swap tables and new meetings begin.
Regardless of how much the industry evolves, modernises and gains new efficiencies, relationships - as many would agree - still form the cornerstone of the business. At GR's recent Buying Strategies Roundtable, QBE's finance director and chief underwriting officer Peter Grove said he had invested in a pair of contact lenses, as: "It is important that you look your future partner in the eye ... you get a true feeling of relationship and it is still vital even in this day and age".
The Rendez-Vous is a facilitator for these all-important relationships, one of those few opportunities in a year of hectic schedules for everyone to be in the same place at the same time. At no other time in the year does so much effort go into organising personal schedules for a period of just four days. And it's not just reinsurers, clients and brokers. Every year, more and more service providers attend the Rendez-Vous, now comfortably outnumbering all other attendees.
For the press, it's a dream. Particularly when there are stormy skies over the North Atlantic. The ubiquitous press briefings and one-to-ones provide unlimited fodder for articles. In every hotel lobby we vie for space for our magazines among stacks precariously balanced on makeshift tables. The Rendez-Vous is both an opportunity to inform and to be informed.
This coming Rendez-Vous promises to be very informing. It is the run-up to another difficult renewals. The pricing and terms on US and Caribbean wind-exposed lines are getting harder, while on many other lines underwriters are under pressure to lower rates. This "Tale of Two Markets", and the reduced capacity for those with hurricane exposures, is likely to dominate discussion at the Rendez-Vous.
As 1 January 2007 approaches, the current challenges - including more stringent capital requirements; recalibrated catastrophe models; capital market solutions; and a hurricane season that has yet to show its true colours - will test many a reinsurance underwriter. Gambling might be Monte Carlo's favourite pastime, but no one will be taking any chances this September.