It's sometimes difficult to judge whether certain topics appear to be the subject of conversation because there's little else to talk about, rather than because they are in themselves important issues.

This year's gathering in Monte Carlo seemed to have a particularly strong focus on security; reserve movements, premium levels and ratings dominated attendees' conversations in the cafes, suites, bars and restaurants of Monaco.

Security: the dominant issue
In fact, the whole issue of security ratings all but monopolised the beginning of the event. On the first official Rendez-Vous day, three of the four major rating agencies launched publications into the state of the industry. The verdict? Uncertain, though the night of the long downgrades appears to be drawing to a close. Still fuming from a downgrade by S&P in late August to A+ from AA-, Munich Re's CEO Nikolaus von Bomhard commented that he would consider raising more funds in order to shore up the world's largest reinsurer's security rating.

These types of statements and decisions are helping fuel the debate over whether the ratings agencies are becoming de factor regulators of the industry. And, in turn, whether organisations with this much perceived power should not be regulated themselves. This debate raged on GR TV, broadcast over four days at the Rendez-Vous and now available to watch via the internet, at In addition, this issue of Global Reinsurance takes a studied look at the stance the ratings agencies are striking, and analysing the recent assessments they have made about the prospects of the industry.

Asbestos cloud looms overhead
On the claims side, the asbestos cloud continues to loom over the industry. Tillinghast-Towers Perrin famously assessed a couple of years ago that asbestos-related diseases could ultimately cost $200bn. Of this sum, $80bn is expected to come from the pockets of defendant companies, $60bn from US reinsurers, and $60bn from the non-US industry. Tillinghast-Towers Perrin continues to stick by these estimates, and noted last month that London market companies have increased their reserves by some $10bn from the beginning of this year. Darren Michaels of Tillinghast commented that there are likely to be more London market companies which will follow this trend, and noted that the speed with which the total cost of asbestos-related claims is being recognised continues to accelerate.

On the premiums side, talk continues that property business generally is stable, while liability - particularly US lines such as D&O - continues to harden. With several named storm systems hitting both the Atlantic and the Pacific in September, the property cat industry has probably received a timely warning that although there has been a benign loss experience for natural catastrophes in recent years, the potential for claims is ever present. For many, Fabian, Isabel and Maemi have been a shot across the bows rather than a cannonball in the midships. But the Atlantic storm season is not yet over, and bearing in mind that Lothar and Martin devastated northern France at the very end of December 1999, a dearth of nat cat losses in 2003 still cannot be assumed.

In the meantime, it appears to be a case of make premiums while the sun shines, in an attempt to strike a balance on the books.

Some of the latest news items to appear on the GR website include:

  • GoshawK's first half results confirm huge losses
  • 'Lloyd's Syndicate Assessments' see 10 syndicates lowered
  • l Insurers to foot satellite loss
  • RGA acquires Allianz's US life reinsurance business
  • New team at Hardy
  • l Swiss Re receives China licence
  • Isabel unlikely to affect insurance ratings
  • Two cats hit Latin America
  • Back to basics the only way forward
  • Ulf Spang quits Skandia
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    By Sarah Goddard

    Sarah Goddard is the editor of Global Reinsurance.