Fevered times at Biba House

Grandchildren - bless them.

No sooner had they pressed their little faces to mine than the tickle in my throat began. They had flown in from Australia and Singapore carrying an exotic bug with which to lay their grandfather low.

I sweat and cough through the day. My sleep is a fevered vortex akin to the current turmoil on the world stock markets as fears that the crisis in the US housing market could undermine the global economy bite. I’m impatient for my health to return just as those traders who have seen market volatility wipe millions from their shareholdings long for greater stability.

The insurance industry, brokers and insurers, may not be immune to the credit market’s problems and I’m sure that the FSA has that in hand.

Floods, hurricanes and earthquakes add their own instability and while individually may be minor ailments for the global insurance market, they must not be ignored.

The insurance market’s health depends upon the availability of capital and underwriting discipline. We need responsible, risk-based underwriting, not a continuing rush to acquire market share on the assumption that all will be OK when rates harden.

We need to remember the customer in this turbulence and, in particular, the conflicting messages they receive from different distribution channels. Brokers have the additional task of accounting for these wildly varying fluctuations in insurance costs to customers.

Trying to explain to a customer the reasoning behind the 30% increase in their buildings and contents cover is because of the recent flooding when all they see on the TV are cut-throat quotes for motor and household insurance is perplexing for both the intermediary and the client.

Commercial customers, too, want to avoid huge swings in their insurance costs if they are to plan for a healthy business.

Managing a secure, but competitive market is challenging for everyone. Let’s hope that the industry sees sense and that some of its participants don’t have to become terminal for market health and underwriting discipline to prevail.

Eric Galbraith is chief executive of Biba