Economic slowdown is (re)insurers' biggest fear

An economic slowdown as the result of the credit crisis is the top risk concerning major insurers and reinsurers, according to a survey by the International Association for the Study of Insurance Economics.

The association, otherwise known as the Geneva Association, polled chief executives of leading (re)insurance companies at its general assembly in Hamilton, Bermuda.

But the credit crisis will not have a major regulatory impact on the insurance and reinsurance markets. Asked about the regulatory consequences of the credit crisis the vast majority (87%) expected a minor tightening of the respective frameworks. 52% saw minor damage to the reputation of the insurance industry arising from the crisis whereas 48% said there would be no impact at all.

Regarding the forthcoming advent of the Solvency II regime, two thirds of respondents expressed their overall satisfaction. And 57% would actually be in favour of accelerating the pace of change.

“The survey clearly demonstrates the CEOs dissatisfaction with the direction and pace of proposed accounting reforms.

Patrick Liedtke, secretary general and managing director of the Geneva Association

The respondents also expressed dissatisfaction with the pace of introducing appropriate International Financial Reporting Standards (IFRS), 55% though this process could be speeded up.

As regards the convergence between insurance and capital markets, e.g. through the securitisation of insurance risks, 52% of the CEOs did not anticipate any impact.

Commenting on the results Patrick Liedtke, secretary general and managing director of the Geneva Association said: ‘The survey clearly demonstrates the CEOs dissatisfaction with the direction and pace of proposed accounting reforms. More efforts are needed to foster mutual understanding between all relevant stakeholders so as to facilitate solutions which reflect the economic importance as well as the peculiarities of the insurance industry.’