Editor’s comment – Long hot summer (for some)

This summer has seen insurers dealing with the ongoing Solvency II deadline fiasco, trying to discover whether their company is now an official Globally Systemically Important Insurer, preparing for the upcoming Common Framework for the Regulation of Internationally Active Insurance Groups (ComFrame) and generally coping with a much more interested and demanding International Association of Insurance Supervisors, and tough talking insurance regulators worldwide.

An interesting side note to all this is whether the insurers now designated as Globally Systemically Important Insurers view it as a pain in the neck, or a badge of honour. It could be looked at as ‘If you’re not on the list, you can’t be a serious global player’. Or alternatively, ‘you are on the list, look at all the ridiculous new requirements.’

Could this be a new form of insurer rating – it can’t do much worse than the actual rating agencies have done in recent history.

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After such a summer, it is now straight into the reinsurance renewal period which unbelievably starts in September at the Monte Carlo Rendezvous, goes on through October at Baden Baden, and finishes (in theory) on 1 January at the actual renewal. The talk at the moment is of lots of additional, alternative capacity coming into the reinsurance market which in theory should lower pricing or at least keep it soft. But it is very early days and you won’t be hearing the likes of Munich Re and Swiss Re talking down the market over the next few months.

What the impact of all this will be on the insured isn’t entirely clear. On the one hand, the regulatory avalanche could mean fewer global players, or rather, fewer looking to become global players. On the other hand, if the reinsurance market keeps offering plenty of cheap capacity, then it might end up a good year for insureds.

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