On Friday, this article appeared in the Guardian:
Lloyd’s of London warned yesterday that an absence last year of natural disasters or man-made accidents was putting pressure on firms to reduce premiums in 2008.
The world’s oldest and biggest insurance market said that though the lack of major disasters had allowed firms to push up profits 5% in 2007, underwriting margins were being squeezed.
As much as I like hard markets (they’re good for those of us in the industry whose bonuses are at least partially tied to profit!), of all the problems to have…market softening due to a lack of large catastrophes is a nice one to have.
Besides, soft markets present a different set of challenges with which us crazed actuaries can be entertained. 