Dear friend,

I don’t get it – why hasn’t capital come flooding in to fill the gap in the burnt out cat, ILW and retro markets? What’s wrong with everyone?

This stuff is good business — it was a great write this time last year and it is still a great write today. Lets’ face it – right now what else is a good write?

I've just had a chat with someone telling me that ILWs paying out on $20bn US wind losses are going at 30%-plus on line. And you can't even get $10bn-trigger ILWs any more!

So we are charging just under a one-in-three rate for $20bn windstorms.

Hang on a minute – this is crazy.

The boffins at Colorado State say there is a 50/50 chance of a Cat 3 or above making US landfall any one year. How many of those will produce insured losses over $20bn?

Well, for the answer check out the great presentation Bob Hartwig of the iii made back in March 2006 – page 11 has all the details.

Since 1900 and even including adjustments for inflation, growth in coastal properties, real growth in property values and increased property insurance coverage, Bob says that only five hurricanes caused more than $20bn in insured losses.

What’s more, two of those were very close on $20bn and could have conceivably come in just under the magic payout number.

So our experience rating suggests that the burning cost here is 4.7% (106 years divided by five).

And you’re getting around 30%.

What are you waiting for? Why would anyone want to be wind-proof?

Surely now’s the time to get yourself more wind-exposed!

Spread the word – go and get the backers on board– this can’t last.