Catastrophe insurance should be a free market, says Julian James
'Leading figures from the world of insurance have rejected the idea of creating a global fund to help victims of catastrophe.
Delegates dismissed suggestions that natural catastrophes will become uninsurable and that a state and federal catastrophe fund is needed to cover the cost of future disasters.
Julian James, director of worldwide markets at Lloyd's, said: "When it comes to the insurability of natural catastrophes the market works best when left its own devices."
He insisted that the global insurance market should be allowed to price catastrophe risk fairly without the need of state intervention.
These sentiments were echoed by fellow delegates, Dr Ameet Dave, commercial director of insurance solutions provider, Room Solutions; Guy Carpenter's president and chief executive UK and Europe, David Priebe, and Andrew Carrier, Kiln reinsurance and catastrophe underwriter.
James called for the "artificial barriers" which stand in the way of "free competition" in the US reinsurance market to be removed.
He said: "Before we get excited about creating a particular fund let the market be a free market and remove the artificial risk and regulatory trade barriers."
As previously reported in Insurance Times, Lloyd's chairman Lord Levene has spoken out on the responsibility of governments and regulators to level the global playing field.
In a speech to the Downtown Association and Insurance Brokers Association of New York in January, Levene said because all non-US reinsurers were required to post collateral equal to 100% per cent of their gross liabilities to US companies "the illogical demand" had helped "drive up the costs of reinsurance and restricted critical capacity".
Both Levene and James have insisted that in the wake of two record hurricane seasons, the insurance industry must now drive forward the debate on catastrophe trends.