ANTHONY GOULD WRITES.....

Well, as third quarter results have rolled in this week from the reinsurance sector it has been interesting to read the different interpretations of why, in a nutshell, despite the understandable fall in profits, be they operating or otherwise, they will all be solid going forward.

With investment returns squeezed and the likes of hurricanes Ike and Gustav draining the coffers, you might expect rate hardening in both reinsurance and the primary market to be a fait acomplis.

Yet, premiums in the primary market continue to fall in most classes according to not only anecdotal evidence from reinsurance brokers, but that supplied by North American risk managers via the latest RIMS survey.

According to RIMS, there was an 8.5% fall in average property premium in the third quarter whilst general liability fell 9.6% - the largest single quarterly drop since 2005.

It may seem self evident that with the fall-out from the sub-prime crisis, and with global recession looming - or already having started - this can’t go on, but to date, it still is.

The primary market has a reputation for talking a good game, playing up its focus on technical underwriting, and then chasing volume and price regardless. Will the reinsurers do the same come renewals in the New Year? Will they continue to talk a hard market and then drop their trousers at the nearest sign of losing the business?

Well, this is one individual who believes their word should be their bond - so let the games begin.

And now, on with the news....

Alex Ferguson writes.....

The (re)insurance industry has never been slow to spot an opportunity.

When there's blood, limbs and bodies on the street, then the (re)insurance industry moves. Well, now carnage is everywhere with financial insitutions and commercial insurance business, everyone and his wife seems to be starting - or increasing - their casualty business.

In recent days we've seen WR Berkley start BerkleyPro, Torus appoint a new head for its global casualty business, and Lockton hire three brokers to head up its financial institutions business.

Add to this Ace deciding to offer commercial D&O from Lloyd's, and you've got an increasingly booming sector.

Wasn't this the same sector that Aon's head of America's Mike Bungert said that the only way it could be resurrected was for journalists to put out the headline: "Toothpaste causes cancer?"

And there was me thinking that all financial institutions had to do was to go to the US government if they needed a big insurance deal....

Alex Ferguson wrote:

To all you fans of Reinsurance’s weekly email, we're so sorry.

We couldn’t think of anything.

So we thought we'd have a drink. But we didn't know who to toast.

Should we salute the (re)insurance industry because at last they look like the Masters of the Universe compared to their Financial Services brothers in Canary Wharf or St Pauls?

Should we wonder how many hedge funds -- some of them who have been accused of ramming up the capacity in the reinsurance market - might be there after they’ve finished paying hurricane claims from Gustav and Ike (“And more’s the case, will the hedge funds tell anybody that their diversification plan has gone awry? Will they reload for next year?” one senior underwriter told us lunch.”)?

Should we have a drink and think of the staff in AIG's offices in the USA, who must be wondering about their jobs after Edward Liddy's speech?

Or should we have a drink to try and forget one of the worst weeks ever for the Dow Jones Industrial Average, which plunged over 700 points IN ONE DAY this week?

One thing’s for certain: it’s been one heck of a week for news.