Dear friend,

We love our catchphrases in this market, don’t we?

“Coast is toast” — do you remember that one from last year?

This was the underwriters’ catchphrase as Gulf of Mexico-exposed property programmes got their prices doubled and their limits halved in a frenzy of capacity contraction and entrepreneurial opportunism.

Well, I’ve got a new one for the 2007/2008 renewal season “underwriters are toast”.

This week I have heard of so many schemes and ruses designed to allow underwriters to keep their income up and hit their targets it is making my head spin. At one point I even thought I started hearing someone say “film finance”, but then I realised I was delusional from over exertion.

Parallel indemnities, deductible buybacks, aggregate sub-layers — they’re all short-term, soft market schemes designed to put a little bread in the jar before the landlord comes calling for the rent.

At the same time I’m hearing of rates plummeting by 50% or more in some cases.

Just where does this leave the idea of a managed slowdown and the phased disengagement with the softening market in 2008 that we have been hearing so much of?

We’re at that point of no return again — please don’t do anything stupid.

If a broker walks in with some new scheme that sounds stupid, that means it is stupid. Send the broker packing before you can be seduced.

If you want it bad enough, and the broker is skilful enough, what sounds stupid at first can seem alluring and attractive after a thorough ‘explanation’.

The trouble with the really stupid stuff is that it quickly descends into farce, but then re-emerges as melodrama before mutating into long-drawn out tragedy.

The market is always telling me that it has changed and it is a reformed character.

“We don’t do stupid stuff any more”, it protests.

Well, here’s a great chance to prove it.