The global happenings in the last couple of months since the conclusion of the meeting of reinsurers at Monte Carlo, in September 2008have inflicted a lot of unexpected and significant changes on the market dynamics of the international reinsurance scene. These changes have already cast dark shadows on the shape and substance of the negotiations of next year reinsurance renewals.
Though a few reputed European reinsurers, who now lead the global reinsurance markets had made a few noises at Monte Carlo (besides those from Bermuda), the primary insurers believed that it was just a few rumbling noises of protest against falling reinsurance rates, indicating more frustration and posturing than any serious intent.
The global insurance markets had not seen any serious losses that threatened the financial futures of the reinsurers. It was generally a benign season. But the sudden and extensive global meltdown of international financial markets in the last two months has negatively influenced the current and future prospects of the insurance/reinsurance industry.The happenings in the AIG, Aegon and ING requiring their bailout by injection of government funds of $85 bn, euros 3 bn and 4 bn respectively have shown that the insurance industry too is bitten by the bug, though to a lesser extent.
The CNA Financial Corporation, the seventh largest commercial line insurer in the US has reported a net loss of $330 mn, for the third quarter, forcing its CEO to quit. The progressive deterioration of the insurance industry is gradually unfolding. The finale is unpredicted as yet.
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