Tom Broughton, editor
If you hadn’t already realised, the way this market is run is about to change. There is a new guv’nor in Washington and he wants to round up the culprits behind the worst financial crisis in a generation. Depending on where your interest sits, President Obama’s economic rhetoric is likely to fill you with a sense of fear or one of hope. But he appears to see prevention as better than cure. Regulation, tax, risk management and capital control will form the spine of his proposed reforms and the implications are likely to dominate the industry’s agenda for months to come (see pages 14-15). We all know the 44th president is a mesmerising orator, but can he talk up the markets? And if words aren’t enough, what actions will he take to revive the system?
If the banks triggered the worldwide meltdown, the travails of AIG symbolised the scale of the problem. A global giant, the state could not afford to let it fail. Presidents and prime ministers have been forced to co-operate over capital provision in a way not seen before. It has become clear that the way in which financial institutions behave across borders will face unprecedented scrutiny.
Given this new approach, what Obama can do to rejuvenate your local market is to restore the global stability insurers once took for granted. At the height of the AIG crisis, clients of all sizes were in a state of panic while large brokers and insurers were looking to jump or to grab business. Meanwhile, down the food chain, the core insurance market was wondering whether the usual trickledown of work would stop. The only speck of hope on the horizon was that pricing would be forced to improve and the market began to really appreciate the value of what it once had.
Looking ahead, the new order is tasked with fixing the structural problems of the economy and with providing a smoother platform on which to do global business. The shrewd players are already positioning themselves for the future. Robert Hiscox for one can smell the opportunity in the air (see pages 18-19). The same message should apply to all players, whether they are UK-wide insurers or brokers in Rochdale.