US insurance market living on a prayer
It seems US insurers' best hope of a turnaround in fortunes is to pray for a big - but not too big - catastrophe, because all other indicators suggest the market is going to be stuck in a rut for the next few years.
The US market faces some serious challenges. Some of these the market is well aware of; others, industry players either have not noticed or are pretending do not exist.
Concern is etched on the faces of many market executives. Executives at the annual meeting of the Property Casualty Insurers Association of America (PCI) that took place in Colorado Springs in October seemed down in the dumps, for instance. And no wonder: almost all indicators are pointing the wrong way.
Despite the tough talk of a new-found sense of discipline, the fear is a repeat of the woes and atrocities committed last time around in this part of the cycle - when savage competition meant insurers spent the first few years of the upturn boosting reserves by the billions....MOREThat's the second time in a week I've seen the need for a big-but not too big- catastrophe mentioned.