A group of notable industry insiders gathered Tuesday to participate in the “View From the Inside Looking Out,” the panel discussion at the 14th annual Property/Casualty Joint Industry Forum. I was lucky enough to attend this event, held at the Waldorf-Astoria hotel in Midtown Manhattan. It seemed as though every major insurance/reinsurance group was represented, along with financial corporations and regulating organizations.
The topic of conversation focused mostly on the performance of the P/C market during the financial downturn and the future of industry regulation.
“The worst of the financial crisis is over, but we still need to avoid inflation,” said Jay Gelb, director of senior equity research at Barclays Capital. “I don’t think the P/C industry is going to see positive growth anytime soon, however.”
Jay added, “The U.S. P/C industry is probably overcapitalized by 20% and we see underwriting losses continuing to rise.”
Joseph Guastella, head of Deloitte’s Global Insurance Practice, agreed. “I think it will start to trend up in 2011, but still a moderate growth at that time. The industry as a whole is going to be a pretty flat market for a while.”
In terms of regulation, both for the insurance and financial industry, the panelists had much to say about the reform they see emerging.
“We need some kind of mechanism for looking cross-sectorally for systemic risk,” said Therese Vaughn, CEO of the National Association of Insurance Commissioners. “What’s going on in DC is less likely to impact regulation than what’s going on globally. International standards are going to become more and more important.”
“I think a systemic risk regime is a bad idea,” said Scott Harrington, professor of health care management and insurance and risk management at Wharton School of Business. “It’s probably the single most destructive idea.”
“What we think will actually evolve is probably less sweeping than we thought six months ago,” said Joseph Guastella.
Though many of the panelists agreed that the P/C sector performed relatively well in the midst of an economic downturn, they all agreed that they should not be overly confident and that the future of the industry requires cautious optimism.
For more on the coverage of this event, check out the P&C National Underwriter website and the Insurance Information Institute’s website.
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