JIF Panel Gives Industry High Performance Marks During Financial Crisis

This year's participants at the Property/Casualty Insurance Joint Industry Forum iterated that the P/C industry performed well during the current financial crisis. The event took place on Tuesday in New York.

Source: Source: Business Insurance | Published on January 14, 2009

Charles Kavitsky, chairman, president and chief executive officer of Allianz of America Corp. in Novato, Calif., said during a CEO panel that despite the industry facing a "double whammy" of natural catastrophe losses and the financial crisis in 2008, "I think the industry did great."

Participants in another panel of industry experts offered similar views. "The property/casualty industry actually did quite well last year on a relative basis," said Vincent J. Dowling, managing partner of Farmington, CT-based Dowling & Partners Securities L.L.C. "The industry…on a relative basis comes out with its model unbroken."

Michael S. Pritula, a director at McKinsey & Co. in New York, agreed, saying that recent turmoil in other areas of the financial services industry such as life insurance, wholesale and retail banking and the securities industry make the P/C industry appear "a relative isle of calm."

Pierre L. Ozendo, chairman and CEO of Swiss Re America Corp. in Armonk, N.Y., and a member of the executive board of Swiss Re Group, credited the property/casualty industry's resilience to its conservative risk management and the fact that the industry "is focused on a business model that has been proven over hundreds of years and continues to be proven today."

But, while agreeing with others' assessments of the P/C industry's recent performance, Michael S. McGavick, CEO of XL Capital Ltd. in Hamilton, Bermuda, cautioned those in the industry "whose eyes might occasionally wander" from the proven P/C business model to other riskier financial operations.

"The problems that we're working through at XL are a consequence of that wandering eye," Mr. McGavick said.

The annual Joint Industry Forum is sponsored by a group of 16 industry organizations.