Tom Broughton, editor

The second half of 2008 will be remembered as the period in which everything changed in the global financial services market. The year began with such promise. Major players were flexing their muscles and marking out acquisition targets. The air was filled with opportunity, as the capital gains tax deadline passed and a slew of deals were completed at the end of April. There was a belief that insurance could be insulated from the credit crunch. But then came multi-billion-dollar write-downs at AIG, crippled banks, stagnant lending, shelved deals and downsizing (see pages 10-13) – not to mention regret and frustration among industry bosses. There must be more than one chief executive who wishes they had floated their business in the first quarter when they had the chance.

Thousands of jobs were lost as confidence plummeted and chief executives realised their cost bases were too high. The sense of opportunity drained away as the price tag of Royal Bank of Scotland Insurance tumbled and the industry’s big beasts began to size up the bargains available at AIG (see page 8) and other wounded animals.

But this week, brokers received an early Christmas present from the discredited FSA (see page 7). It looks like the ultimate fudge and captures the current mood of uncertainty. The FSA wants a market-led solution on commission disclosure by 2011 – probably because it would struggle to impose anything else on an already disgruntled intermediary sector. It would be easy to see this as a reprieve from a regulator in trouble, following some excellent work from the industry’s lobby. But the FSA may not be around for too many more Christmases, so consider this ruling just the beginning of another long negotiation – a process that is likely to be led by a regulator yet to show its face.

Reality check

If the world of financial services became a little smaller this year, 2009 will be about a new realism emerging in markets and individual companies. The 12 months ahead are likely to be challenging as the economic climate worsens, but there is still a great deal of opportunity in a marketplace that has never been so dynamic.

We’ll be back on 8 January 2009 to keep you informed of every move but, in the mean time, you can read breaking news at insurancetimes.co.uk throughout the festive period. I would like to wish all our readers a happy Christmas and a prosperous new year.