Tom Broughton, editor
When one of the reinsurance giants sneezes, the market catches a cold. Insurers still have confidence in Swiss Re despite the recent turbulence at the company and the £500m loss it reported earlier this month (see page 12). Nevertheless, capacity remains the number one concern for insurers. While it is still available, there is an opportunity to avoid pitfalls.
Forecasters are beginning to grapple with movements in pricing but it may take another 12 months for the impact to trickle down from the top into the general market. New Swiss Re chief executive Stefan Lippe has indicated that the business needs surgery and has set a 90-day deadline to execute the change. The board accepts that it has made mistakes, particularly with its risk management controls and underwriting position on credit default swaps. AIG aside, Swiss Re has become the most high-profile insurance entity to fall victim to the credit crunch, although it says its competitors are suffering similar rating downgrades. The business is looking to maintain stability. “We have no plans for a rights issue. We believe we have adequate capital and plan to generate capital organically,” its new management team told Insurance Times.
Whatever happens, it will certainly be an interesting couple of years at Swiss Re – especially now that Warren Buffett has his foot firmly in camp.
Come on FSA – we need a level playing field
Why can’t price comparison websites be regulated like everything else? While it is admirable that the aggregators are working with the ABI to draw up a new code of conduct (page 10), you can’t help but suspect they are using the industry’s lobby group to enhance their profile and gain some gravitas.
Let’s be clear: at the top of the market the larger aggregators conform to FSA bureaucracy, but how many smaller lifestyle businesses are undercutting and undermining legitimate brokers? And how long will it be before another computer geek in a bedroom invents the next program that will take out another slice of the commercial market? We need a level playing field and we need it now. It is time for the FSA to take action.