Dear Friend,

Well, I must say now that the renewal season proper is finally kicking off, it’s quite a relief.

First we had the “phoney war” period around Monte Carlo , where preliminary Katrina damage estimates were coming out, but nothing much was happening.

Now many of those initial estimates have more than doubled and mega-cash and 2006 targets have been raised by the most nimble, it’s time to go out and earn that extra premium.

The only trouble is that now is the crunch. A lot of that capital has been raised on the grounds that a 2006 reinsurance dollar has got a great chance of earning a bumper return.

But as you know I just don’t see rate rises across the board.

Gulf of Mexico – yes of course you’ll get your rate hikes — but since all the models have been proved inaccurate you are effectively underwriting blind. And I still don’t see you getting much in areas that haven’t had losses and whose technical rating is still more than adequate.

So are you ready to “suck it and see” in the danger zone one more time? How lucky are you feeling?

Surely the only available underwriting tool left functioning — the seat of your pants — is telling you that it’s almost a statistical certainty that the Gulf Coast is going to get at least one Category 4+ landfall next year?

It’s decision time — are a few extra dollars going to swing it? Next year’s hurricane season is either going to make you look like a genius or a dunce. Unfortunately this time the decision is 100% yours.

Good luck, I really don’t envy you.