Insurers and reinsurers must resist the temptation to become complacent in a hardening market, the chairman of the International Underwriting Association (IUA) has warned.

Addressing delegates at the conference, Stephen Cane said the impact of the World Trade Centre (WTC) would lead to "boom conditions and a reinsurer's vision of paradise".

But he urged underwriters to remain on their guard. "For the time being, underwriters will have the upper hand," he said. "But they should avoid getting too carried away and the temptation to become complacent.

"That would undo much of the good work done in the modernisation of the market, which would be a tragedy.

"The WTC will be a much bigger loss than ever before. It is bound to be an inevitable catalyst, but the question is, for what?"

Cane said he expected the market to continue to work towards achieving efficiencies in the processing of policy documentation and monies.