Influx of new capital and growth the biggest worries

The continued soft market combined with the spectre of clients seeking even more rate cuts is the biggest worry of PCI delegates, according to an online poll of Intelligent Insurer readers carried out in the run up to the conference.

Some 31 percent of respondents chose this as their biggest concern/challenge at the moment with many respondents bemoaning the difficulty they already face on rates with certain types of clients.

“We target mutuals. The margins are already paper-thin in this segment with combined ratios often running over 100 percent” said one. Another added: “It is getting to the stage where some cedants are pushing too far now. A line needs to be drawn in the sand.”

Yet for all the doom and gloom in some quarters, almost as many respondents seem relatively optimistic. Some 29 percent said that business is good and they have no concerns right now. “Yes, the industry is full of change but look at the profit margins. Ours remain healthy,” said one.

The next biggest worry for insurers was the influx of alternative capacity, followed by consolidation and cedants restructuring their programmes and buying less coverage.

The first of these was chosen by 20 percent of the respondents—perhaps less than it might have been a few years ago. Despite the rapid rise of ILS, the market also has bigger concerns to contend with at the moment.

As one respondent said: “I have been in this game for 30 years. I have seen hard markets, soft markets, hurricanes and terrorism attacks. But never so much change, on so many fronts for such a prolonged period of time.”

What is your biggest challenge/concern this renewals season?