AIRMIC conference breaks all records but members believe soft market is over

He said that his theme for the year has been ‘influencing outcomes’ and pointed to some of the events of the year, such as the turmoil created by the Icelandic volcano. “Events like this show that you simply cannot have too wild a thought with regard to your scenario planning. Crazy stuff does happen. If it is not totally impossible, then it is possible.”

John Hurrell, AIRMIC’s CEO, then highlighted some of the results of a pre-conference member survey which revealed that 92% believed that the soft market was over – the majority believing that rates will be flat, with some expecting increases, depending on the classes of insurance.

The survey also revealed that departmental costs were still under pressure but were easing slightly – it was the old story of being asked to do more with less resources. Mr. Hurrell also announced the surprising result that ‘Brokers were 73% transparent’. He said this was a bit like being 73% pregnant. This figure was slightly down on last year.

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On the classic question of what was the number one ‘keep awake at night’ issue, it was once again reputation risk. On this issue, AIRMIC is carrying out a three phase programme with Cass Business School over the next year or two.

The first phase is to survey members on what reputation risk means for their individual companies. The second phase will be to analyse events from 2000-2006 and find out what happened to companies and what the implications were for those organisations. The third phase will be to provide best practice examples and lessons learned from the case studies.

Mr. Hurrell also pointed to a result from the survey which said that 27% of respondents had had a claim turned down in the past two years, a third on the grounds of non-disclosure.

In an AIRMIC member survey earlier in the year, one third of respondents had had a non-disclosure problem on an insurance programme in the previous 5 years. “Frankly, this is unacceptable,” said Mr. Hurrell, “given the time and trouble putting together annual presentations.” He said that the 1906 Marine Insurance Act was outdated, and AIRMIC was having ‘positive discussions’ with insurers.

As a result, AIRMIC announced that in the Autumn it would be producing a member guide to the issue of non-disclosure, and how to overcome the problems.

The conference was attended by the RIMS President and the President of FERMA. The latter, Peter den Dekker, said that AIRMIC and FERMA were working together more closely than ever. He said it was important to work on disclosure and transparency. He noted the survey result that 73% of brokers were transparent and echoed Mr Hurrell’s earlier comment: “You are either pregnant or not, and not just a little. Brokers are either transparent or they are not.” He added that FERMA’s goal was to identify potential conflicts of interest.