Behind bullish messages lie warnings of recession as the PCI Conference kicks off
The PCI conference was kicked off today by a rallying cry from new CEO David Sampson.
“We are a foundation industry,” he said. “Nothing moves in the US economy without insurance… Today our economy – every sector including the property and casualty industry – faces an innovation imperative. That is the challenge we face as an industry and a trade association in both the public policy and operational arenas.”
Sampson recognised that insurance suffered from an image problem in the eyes of the insurance-buying public but challenged the industry to help enhance the image of the industry among consumers and policy-makers alike.
“Enhancing our image and reputation will not be easy, nor will it occur overnight,” he said. “But it is possible and we must make this a priority for PCI and the industry.”
Meanwhile Congressman Barney Frank outlined his efforts to gather support for a federal backstop for catastrophes.
“A bill is currently making its way through the appropriate channels and should emerge early next year,” he revealed. “We are determined to do something about a backstop – whether it is national catastrophe bonds or state cat funds.”
“TRIA without group life cover is like a neutron bomb - you are compensating for the loss of buildings but not the loss of life. That makes me very uneasy
He also told the audience that he would like the renewed Terrorism Risk Insurance Act (TRIA) to last for at least ten years and to include group life cover.
“TRIA without group life cover is like a neutron bomb – you are compensating for the loss of buildings but not the loss of life. That makes me very uneasy.”
Meanwhile, in his keynote address, Steve Forbes, president and CEO of Forbes, told delegates that we were living in an unprecedented era of growth.
“People will look back on this time in years to come and recognise it as a golden era,” he predicted. “Since 9/11 alone, the global economy alone has expanded by 30%. Hundreds of millions of people around the world are joining the middle class.”
However he also sounded a warning bell over the current credit crisis stemming from the summer’s subprime collapse in the US. He said that rating agencies were “useless” and not to be trusted, and that there was “no need for a recession if we don’t muck things up.”