Lloyd�s underwriters see managing the insurance cycle as the most important challenge facing the global industry for the second year running, according to new research published today.
The findings come in the wake of two record hurricane seasons. The research, Lloyd�s second annual underwriter survey, revealed that nearly 90 per cent of underwriters believe that windstorm is likely to be the biggest cause of loss to the industry in 2006.
More than half of those questioned believe that avoiding the �boom and bust� nature of past cycles will be the most powerful way to strengthen the industry�s reputation.
But over two thirds said that the industry had not made enough progress on the issue over the past year, and more needed to be done to address it.
Regarding last year�s catastrophes, those questioned highlighted Lloyd�s underwriters� fast response and ability to pay the resulting claims as the market�s key achievements in 2005.
Other key findings include:
more than half of Lloyd�s underwriters think that the United States and China will offer the most significant growth opportunities;
contract certainty and increased transparency were highlighted as key challenges the market must face in 2006; and
Lloyd�s underwriters� appetite for difficult risks is believed to be their strongest source of competitive advantage, followed by the heritage of the Lloyd�s brand and the market�s superior underwriting expertise.
Lloyd�s Director, Worldwide Markets, Julian James, said:
�With two severe hurricane seasons behind us, these findings underline the fact that the need for cycle management has never been more crucial for insurers and reinsurers. Ensuring strong financial performance remains a priority for Lloyd’s, and is a key part of our strategic plan.�