2007 was a rather staid year for the P&C industry, allthings considered. Yes we had floods, windstorms, a few tornados,and those terrible California wildfires, but the other big nemesis,the reviled hurricane, did not ravage any Southeast coastal areas,as happened in 2004-05. (Yes, we had damage in some Mexicanterritories, but they were lightly populated and were not a majorconcern for the U.S. insurance industry.) That's not to say theindustry is not facing challenges. There are a number of issuesthat we must be aware of as we go into 2008:

Boomer retirements are looming. As these experiencedprofessionals in the adjustment arena move out of the activeworkforce, what are we doing to replace and train those who arestepping in to take over?

Workers' comp losses are diminishing, thanks to efforts byleading insurance states with legislative clout, like Florida,Texas, New York, New Jersey, and California. Other states,heretofore less vocal (like Illinois) are sure to pick up thebanner.

How are legislative activities going to affect the industry, andadjusters in particular, in '08? We're contending with TRIA (a goodthing!), no-fault extensions, and the continual efforts to curbfraud and its serpentine expansion.

Adjuster compensation is still lagging, and we're havingcontinual difficulty attracting talented people to this challengingfield. Should carriers and independents take up the standard toattract them to the field? And if so, how? What kind of incentivesshould we be offering?

Are the numerous state and national associations up to the taskof going to bat on a more active basis to support industryincentives to recruit talent in the adjuster arena?

Are there geographical issues coming into play here? We're allaware of landslides in California, sinkholes in Florida, hurricanesin the Gulf region, and tornados in, well, everywhere. But whatabout the other crises? Like wildfires, for instance?

And yes, there's that pesky global warming issue. What's thatgoing to do to coastal regions, where approximately 38 percent ofthe country's population resides?

Are we making the most of technology advances? What are youlearning through your company's efforts? Your own?

And the good news: According to a recent report, the generalliability line continues to see recovery in profitability, with apositive double-digit ROE. Much of this financial improvement comesas a result of reserve releases. Reflecting the history ofvolatility in this long-tailed line, forecasts through 2009 suggesta leveling in results, and possible turnaround.

For whatever good news, there's a damper here and there, butthat's just an editorial opinion. Cat adjusters are suffering forlack of work and challenges, not that anyone wishes for acatastrophe, but still . . . Restoration firms are scavenging atsites of house fires, etc., if you get our drift. That was, untilthe California fires.

Yes, there was horrendous flooding in the southern Midwest andwe're still dealing with Katrina in the Gulf Coast area, but a lotof the insurance challenges there have been met (even though thatsounds somewhat cruel, facts are facts). Bottom line: 2008 will bea challenge in more ways than one, or two, or three.