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RISKbitz: Reinsurers cap soft market leaks
20 July 2010
The International Association of Reinsurers and Insurers has finally succeeded in placing a temporary cap on stories about a continuing soft market. For the past few months, rumours and reports about a never-ending soft market have been leaking to the press, seriously damaging the insurance sector’s attempts to talk the market up.
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The International Association of Reinsurers and Insurers (IAORAI) has finally succeeded in placing a temporary cap on stories about a continuing soft market. For the past few months, rumours and reports about a never-ending soft market have been leaking to the press, seriously damaging the insurance sector’s attempts to talk the market up.
"The insurance industry's image has been polluted by these leaked stories of an interminable soft market," said an IAORAI spokesperson, Evangelista Bordereaux. "We've tried everything to stop flow – press briefings, advertising, injunctions, but nothing has worked until now."
She explained that as a final attempt to get the spreading soft market under control, the insurance and reinsurance industry had invited all insurance journalists to a three week press briefing in the Seychelles, to explain how the price falls were stabilising and even showing some signs of solidifying in certain sectors.
“With the Rendez-Vous coming up, we need to get this bad news pipeline blocked," said Sir Cuthbert ‘Cutty’ Sark, chairman and CEO of Hapless Insurance. “We're in seriously deepwater if this blows again. We need to get the hardening market message across quickly, and then reinforce it during the conference season when all the journos will be pissed – along with our clients.’
Todd Gwynion, reporting for RISKbitz from a lounger at the press call in the Seychelles, said that the free bar and delicious seafood barbeque was undoubtedly hardening market sentiment. “If this goes on for a few more weeks, I think we will definitely see signs of a turning market. But it’s too early in the holiday to say whether this will be a temporary blip in the unending soft market. Sorry, got to go, the lobsters are burning.”
The impact of the leak is likely to be felt for years with insurers and reinsurers hampered in their attempt to clean up with higher rates. The leak has mostly affected the south-east coast of the US, the area most prone to hurricanes. “This is just where we need rates to harden,” said Ms Borderaux. “It is a disaster waiting to happen.”