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Market Cycle Forecasts Offer No Shortage of Opinions At RIMS

Source: BestWeek

Posted on 04 May 2010

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As reported in BestWeek US/Canada, it will take something major to shake off the soft market, according to insurance executives attending the 2010 Risk and Insurance Management Society conference in Boston.

Some who were interviewed in a feature in BestWeek see a turn in the gloomy Atlantic hurricane season forecast, should it prove accurate and the U.S. coast gets battered by storms. Some worry high inflation is on the horizon and that will tip the market.

And as much as insurers tout their underwriting discipline, historically there have always been a few carriers who have lowered their prices too far during the soft market and the risk outweighed the premium income when it came time to pay claims. All of these are possibilities insurers have posited as market hardeners.

In BestWeek Europe, a lack of a federal insurance regulator in the United States not only hampers international insurers in their dealings in the country, it could impact U.S. insurers operating in Europe, said Peter Levene, chairman of Lloyd's. The United States, with its state-based insurance regulatory system, has 55 regulators insurers must deal with, if they are operating nationwide, Levene told BestWeek at the 2010 Risk and Insurance Management Society conference in Boston.

Also in BestWeek US/Canada, state officials are concerned that new federally backed health insurance pools could be "high-risk" in more ways than one. As regulators prepare to meet a June 21 deadline for establishing high-risk pools for hard-to-insure residents with pre-existing conditions, many remain unsure about the rules they will have to follow and how to structure their pools to pass muster with the U.S. Department of Health and Human Services. States had until April 30 to notify HHS whether they will operate their own pool or leave that task to the federal government.