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[B] Premiums fall off with second quiet US hurricane season[/B]


By Yvette Essen, Insurance Correspondent
Last Updated: [COLOR=#000000]1:03am BST[/COLOR] 10/09/2007


Two years of unexpectedly quiet hurricane activity in the US have caused a dramatic drop in insurance premiums that, experts say, could spark consolidation amongst brokers and underwriters.
 [IMG]http://www.telegraph.co.uk/money/graphics/2007/09/10/cnins110.jpg[/IMG]Brokers are predicting cover for hurricanes in the will tumble by at least 10pc in 2008

The chief executives of the world's largest insurers and brokers are predicting cover for hurricanes in the US will tumble by at least 10pc in 2008 - on top of a 20pc slump in premiums this year.
They forecast the sharp falls as they headed out to Monaco, where they meet over the next few days to estimate demand for next year's policies. The annual Monte Carlo Rendezvous is the most important event in the industry's calendar where reinsurance companies, which provide cover to insurance businesses, unveil their demands for 2008. Insurance companies tend to pass on any premium changes to their policyholders.
Grahame Chilton, chief executive of the world's third largest reinsurance broker Benfield, said despite some major hurricanes such as Felix, this has been a benign storm season.
"In 2007, catastrophe reinsurance fell by around 5pc and insurance was off by more than 20pc," he said. "Without a major loss, we are expecting a reduction of between 5pc to 10pc for reinsurance and for insurance, much more."
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It is thought insurers at Lloyd's of London could reduce the maximum amount of business they can underwrite in 2008 as a result of the sharp premium falls. This could lead to total capacity at the world's largest insurance market dropping from a record level of ?16.1bn.
Although a quiet hurricane season could lead to record profits, a fall in prices combined with the negative impact of a weak dollar may lead to takeover activity in the sector. Mr Chilton said: "There will be further consolidation."
He said the growth of capital markets is likely to continue, with more demand for catastrophe bonds, which give investors a generous interest rate if they take on risk. "For the first time in 2007, cat bonds were more competitive than reinsurance," he said.
Stephen Catlin, chief executive and deputy chairman of Catlin - the largest syndicate in Lloyd's - agreed the relationship between reinsurance and capital markets will be a major discussion point. "Some people are always quite protective of their own position," he said "But I think there is not enough capital in the reinsurance market to pay for the big exposures in places like Florida. As such, using the capital markets as a buffer is evidently sensible."

Premiums fall off with second quiet US hurricane season 
 
 
By Yvette Essen, Insurance Correspondent 
Last Updated: 1:03am BST 10/09/2007 
 
 
Two years of unexpectedly quiet hurricane activity in the US have caused a dramatic drop in insurance premiums that, experts say, could spark consolidation amongst brokers and underwriters. 
 <img src="http://www.telegraph.co.uk/money/graphics/2007/09/10/cnins110.jpg" alt="" />Brokers are predicting cover for hurricanes in the will tumble by at least 10pc in 2008 
 
The chief executives of the world&#039;s largest insurers and brokers are predicting cover for hurricanes in the US will tumble by at least 10pc in 2008 - on top of a 20pc slump in premiums this year. 
They forecast the sharp falls as they headed out to Monaco, where they meet over the next few days to estimate demand for next year&#039;s policies. The annual Monte Carlo Rendezvous is the most important event in the industry&#039;s calendar where reinsurance companies, which provide cover to insurance businesses, unveil their demands for 2008. Insurance companies tend to pass on any premium changes to their policyholders. 
Grahame Chilton, chief executive of the world&#039;s third largest reinsurance broker Benfield, said despite some major hurricanes such as Felix, this has been a benign storm season. 
&quot;In 2007, catastrophe reinsurance fell by around 5pc and insurance was off by more than 20pc,&quot; he said. &quot;Without a major loss, we are expecting a reduction of between 5pc to 10pc for reinsurance and for insurance, much more.&quot; 
advertisement 
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It is thought insurers at Lloyd&#039;s of London could reduce the maximum amount of business they can underwrite in 2008 as a result of the sharp premium falls. This could lead to total capacity at the world&#039;s largest insurance market dropping from a record level of ?16.1bn. 
Although a quiet hurricane season could lead to record profits, a fall in prices combined with the negative impact of a weak dollar may lead to takeover activity in the sector. Mr Chilton said: &quot;There will be further consolidation.&quot; 
He said the growth of capital markets is likely to continue, with more demand for catastrophe bonds, which give investors a generous interest rate if they take on risk. &quot;For the first time in 2007, cat bonds were more competitive than reinsurance,&quot; he said. 
Stephen Catlin, chief executive and deputy chairman of Catlin - the largest syndicate in Lloyd&#039;s - agreed the relationship between reinsurance and capital markets will be a major discussion point. &quot;Some people are always quite protective of their own position,&quot; he said &quot;But I think there is not enough capital in the reinsurance market to pay for the big exposures in places like Florida. As such, using the capital markets as a buffer is evidently sensible.&quot;

Floridaz

Beach Comber

A great site...I just saved over $1500 on my insurance...
 
[URL]http://www.shopandcomparerates.com/HOCompareRates.htm[/URL]

A great site...I just saved over $1500 on my insurance... 
 
<a href="http://www.shopandcomparerates.com/HOCompareRates.htm" target="_blank" class="link link--external" rel="nofollow ugc noopener">http://www.shopandcomparerates.com/HOCompareRates.htm</a>

yippie

Beach Fanatic

[quote="OnLakePowell, post: 296603"]A great site...I just saved over $1500 on my insurance...
 
[URL]http://www.shopandcomparerates.com/HOCompareRates.htm[/URL][/QUOTE]

Isn't it odd.  Nationwide is not on the list for either Okaloosa or Walon Counties.

<blockquote class="xfBb-quote" data-name="OnLakePowell">A great site...I just saved over $1500 on my insurance... 
 
<a href="http://www.shopandcomparerates.com/HOCompareRates.htm" target="_blank" class="link link--external" rel="nofollow ugc noopener">http://www.shopandcomparerates.com/HOCompareRates.htm</a></blockquote> 
Isn&#039;t it odd. Nationwide is not on the list for either Okaloosa or Walon Counties.

`The industry would probably like to see a midsized storm this year that would help them take up rates,'' said Joshua Shanker, an insurance stock analyst at Citigroup Inc. in New York.

[url]www.bloomberg.com/apps/news?pid=20601103&sid=aWuWjvhiv8Y4&refer=us[/url]

`The industry would probably like to see a midsized storm this year that would help them take up rates,&#039;&#039; said Joshua Shanker, an insurance stock analyst at Citigroup Inc. in New York. 
 
<a href="http://www.bloomberg.com/apps/news?pid=20601103&amp;sid=aWuWjvhiv8Y4&amp;refer=us" target="_blank" class="link link--external" rel="nofollow ugc noopener">www.bloomberg.com/apps/news?pid=20601103&amp;sid=aWuWjvhiv8Y4&amp;refer=us</a>

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$$$ Huricanes $$$ and Ins. Rates

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