I write this sitting in a café in Montreuil sur mer, a lovely medieval walled town in Northern France. The ‘sur mer’ bit is wishful thinking as the sea receded centuries ago. Still, it’s a nice thought.
Why do I mention this? Well, look at the UK insurance market, a world where the sea no longer gently laps at the shoreline. The tide has long since gone out.
Of course, when a tide goes out we’re left with the flotsam and jetsam. In commercial terms, our investment and underwriting strategies are laid bare.
This has become all the more apparent when looking at the current stream of interims from UK players, which time after time reveal the continuing difficulty underwriters have in trying to make decent returns on the investment side.
Whether this be adjusted bond values or our old foe - mark to market losses - once again resurfacing, there really is little room for manoeuvre here.
Don’t get me wrong, I’m not out to criticise underwriters here. If anything UK insurers have done a sterling job in the past couple of years in trying to make something coherent out of the squalid mess of capital investments.
But as you might have heard once or twice before, every cloud...
And this particular silver lining is one which the market should welcome as it means attention is focused on professionalism and skill. With investment returns still so volatile and unremitting, however, this leaves underwriting centre stage, which for an old fashioned geezer like me is no bad thing.
I feel I might have more to say on this subject…
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