London market insurers remain bullish about future growth

Published at 10:50 AM on 12 September 2006

London market insurers are confident that they will deliver strong returns in 2006. But today’s risk environment casts a shadow of doubt over the outlook for 2006.  According to a new report by PricewaterhouseCoopers LLP, there are continuing concerns about the reliability of, and over-reliance on, catastrophe and aggregation models, as well as the lack of capacity in the retrocessional reinsurance market. Philip Calnan, partner, PricewaterhouseCoopers LLP, commented: "A number of leading insurers posted strong results in 2005 and entered 2006 with their credit ratings confirmed, ready to take advantage of hardening rates in many of their key business areas. However, in the wake of the growing frequency and severity of natural catastrophes, London market insurers are still facing an increasingly volatile risk equation. “Most companies are confident that the lessons absorbed from the 2005 hurricane losses will stand them in good stead for 2006. This confidence is tempered, however, by concerns over the availability of reinsurance capacity on appropriate terms and whether risk information and models are sufficient to provide a fully effective basis for decision making.” PricewaterhouseCoopers fifth annual survey on the key issues affecting the London insurance market revealed that the most important management challenges for market participants included the achievement of comparable underwriting performance to prior years, institutionalising effective cycle management, embedding capital and risk management into the day-to-day running of the business and improved management information. The effective monitoring of aggregations of exposure is cited as the most important issue on the CEO agenda. Paul Delbridge, partner, PricewaterhouseCoopers LLP, said: “Concerns have been raised around the quality of the underlying data, potential leakages in the capture of exposures, the lack of consistency between different classes of business and the use of models that primarily rely on relatively limited past experience as a guide to the future. "Although organisations appear prepared to take decisive action to limit the impact of a cycle downturn, the absence of adequate pricing controls and monitoring could lead to a damaging disconnect between intention and execution. It is clear that London market insurers are continuing to evolve to adapt to the latest challenges facing the global insurance market. So, while there does exist a degree of optimism for 2006, CEOs and their organisations are not standing still.” The survey identified expansion into new markets as an additional area of development.  Paul Delbridge, further noted that: “Many believe that Bermuda is now the pre-eminent centre for property catastrophe reinsurance. The attractions include access to a lot of the high-value US business not generally seen in London. As a consequence, a number of London market insurers have, over time, set up operations in Bermuda, and many of the larger businesses are seeking to develop their network of representative offices in the US, as well as in the UK, Continental Europe and Asia.”  ENDS

Notes to Editors:

1. For a copy of the’ London Insurance Market’ survey, please contact Frances Lilley on +44 20 7212 6917 or email [email protected] 2. The member firms of the PricewaterhouseCoopers network provide industry focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries across our network work collaboratively using connected thinking to develop fresh perspectives and practical advice. Unless otherwise indicated, PricewaterhouseCoopers refers to PricewaterhouseCoopers LLP ( a limited liability partnership incorporated in England. PricewaterhouseCoopers LLP is a member firm of PricewaterhouseCoopers International Limited. 

For more information contact:

Rebecca Laird.
CIPS Manager, PricewaterhouseCoopers LLP 
Tel:020 7213 5829 
Mobile:07793 680 467 


About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details. © 2016 PwC. All rights reserved

« PricewaterhouseCoopers reports UK turnover of £2 billion and operating profits growth of 24% | Homepage | Aerospace and defence sector uniquely at risk from fraud »

  • Contact us
  • +44 (0) 20 7213 1768

Specific and out of hours contacts