In this regard some trends seem to prevail

"Rendez-vous de September" (RVS), which, until tomorrow, allow insurers and reinsurers to prepare the conditions for renewal of their treaties at 1 January 2007, have this year the flavour of the calm before the storm. No major disaster to date, steps of degradation of "rating" on the part of agencies rating, or even discussion of place very restless. "It is very well, this allows to return to the fundamentals", commented on, amused, a professional.

In this regard, some trends seem to prevail. "The cycle changing nature," said yesterday Jean-Philippe Thierry, CEO of AGF and President of the Organizing Committee for the SVR. Even if a reinsurer as Swiss Re, the world leader, stressed that the volatility of the sector is increasing because of trends in natural disasters, the issue is to limit the effects on the results. Standard & Poor's also wants to believe that in the future, "the cycle will be less pronounced", reflecting a greater underwriting discipline. Some, such as SCOR, go so far as to talk of the disappearance of the cycle.

With the rule of non-proportional excess of claims blankets, "stop-loss" (1) insurance and reinsurance cycles are now less correlated. "Reinsurers and direct insurers no longer live the same story, recognizes Jean-Philippe Thierry. Insurers are focused on the risks of frequency and suggest risk of leading reinsurers, to share them in time and space. "A vision of the world which raised a few concerns with the latter, with requirements growing capital, anxious to limit their dependence on financial markets and well aware that bad years can less and less be offset by the good.

Hard cost estimate

Hence the importance for reinsurers, to reopen the debate of "sharing of fate" on a number of topics, France including. The more acute is probably that the automobile liability: on the one hand, insurers benefit from the decrease in frequency of accidents (branch is once again profitable), the other reinsurers suffer serious bodily claims inflation.

This is in addition the issue of the guarantee unlimited, mandatory in France, an "anomaly", Swiss Re. However, more reinsurers raise prices (they have doubled in three years), most insurers are tempted to increase their retention. Very picked up on the subject, Munich Re, which the average load of serious punishment claims increased by more than 30 since 1990, believes that the crux of the problem lies in "the extreme length of liquidation periods, which makes very difficult the cost estimates", as well as in the "retrospective already subscribed covers inflation." Number two world, supported by Swiss Re, claims therefore "more fairness", which could pass through "the re-injection elements of proportionality in the contracts."

Another point of friction, cover against attacks. In France, it is obligatorily granted by the direct insurers in contract damages. However, as Munich Re or Lloyd's, most reinsurers view that terrorism is almost not insurable: frequencies are unpredictable and caused damage is potentially unlimited. The system takes in France through Gareat renewed for 2007 a pool consisting of all insurers in the market and with the guarantee of the State, via the Central reinsurance Fund. Reinsurance cover so that the included range between 400 to 500 million supported by the insurance market, and the 2.2 billion beyond which the State intervenes. It remains that some sector heavyweights refuse, on principle, to cover the nuclear risk. "We will probably get the guarantees requested during the 2007 renewal, but the problem will be terrorist attack", concludes Jean-Philippe Thierry.