Reinsurers, 'Don't Worry, Be Happy'

Here at the Reinsurance Rendez-Vous in Monte Carlo, after conversations with attendees including ratings agencies, reinsurers and brokers, I came to one conclusion: that reinsurers need to take a pill and relax.
 
At numerous press conferences the consensus was the same--there is not a lot happening in the industry and little change from last year. In fact, this year's theme at Monte Carlo, it seems, it capacity and lots of it. Yes, there have been a number of catastrophes in 2010, including floods in pakistan and China, earthquakes in Haiti, Chile and New Zealand, drought and wildfires in Russia and winter storms in Europe, but they did not impact cpacity.
 
The lament is that with the recession, risk managers are purchasing less from primary insurers and this is trickling up to resinsurers. The word at Monte Carlo, spoken by more than a few executives and ratings agencies was that a large disaster on the order of $50 billion to $80 billion is needed to shake up the soft market. But in the meantime, ratings agencies and reinsurers themselves report the industry is solid.
 
And so this is my message: take to heart the words of a song popular a few years ago, 'Don't Worry, Be Happy.' In other words, recognize that in the scheme of things, there is more than enough time for calamity and disaster. You've shored up and battened down the hatches, so enjoy the calm while you have it. To be sure, a disaster is coming, probably around the corner in fact. But courting it may not be such a good idea, as you could end up with more than you bargained for. Just ask Tony Hayward.