Insurance Agenda, May 09

The hardening of the reinsurance market is now taking hold worldwide, with the Japanese market the latest to show an upturn in prices when its renewal season concluded on 1 April.

As David Sandham reports (page 2), what makes this part of the cycle different to other such periods is that new capital, attracted by rising premiums and potential for greater returns, is not flowing into the sector.

Insurers’ distribution strategies are also changing with the use of managing general agencies (MGAs) coming under scrutiny. As a consequence the MGA model is evolving (page 3).

The economic climate is forcing the insurance sector to look at its costs. Some of the world’s major brokers have announced major cost-saving initiatives in recent weeks. As Nathan Skinner argues, these companies must take care to ensure that the quality of service offered to corporate clients is not adversely affected by these measures (page 4).

Meanwhile, pressure is mounting on offshore financial centres like Bermuda after last month’s G20 summit. Insurance businesses that operate in such jurisdictions are unlikely to escape additional regulation in the coming years (page 5).

Finally, Nathan Skinner argues that the financial crisis has exposed flaws in corporate governance that must be addressed to ensure the proper function of risk controls (page 6).