Volatility and risk are high for P&C insurers—and for theeconomy at large. This comes as no surprise to claims professionalsand others in the industry; however, knowing what we are up againsthelps minimize fear while positioning various entities and claimsprofessionals for success amid the varied challenges.

Thomas Holzheu's closing keynote on Friday, May 29th at thisyear's ACE will help make sense of the trends and takeaways inthis chaotic environment and help keep insurers from being caughtoff guard. Holzheu, head of economic research and consulting forNorth America at Swiss Re American Holding Corporation, will shedlight on the latest data about the market and will help attendeesgrasp the implications of the market and bring together theinformation from the whole event so they can move ahead withforesight.

Holzheu will share data gathered by Swiss Re, a leading providerof reinsurance and insurance-based forms of risk transfer. The datahighlights an “unprecedented amount of catastrophe losses on theproperty side,” according to Holzheu. “There were a lot ofsurprises about where those exposures were located and thefrequency of losses.”

Holzheu also shares that there were many twists in internationalbusiness. Swiss Re's global corporate clients had exposures insurprising amounts with peculiar risk rates.

“On the casualty side, things are even more tight,” Holzheusays. Plagued by a slow economic environment, “low interest ratesare affecting profitability very adversely. And the claimsenvironment has been more benign in the past.”

While the information itself may not be entirely new to P&Cinsurers, it has far-reaching effects. The implications of thesemarket conditions will form the backbone of Holzheu's session.

Insurers everywhere are asking: is the market hardening? Holzheusays the data shows that we have reached a “turning point of thetrend,” but there's “still a ways to go.”

“[The present market conditions] seem to be a manifestation of alonger term and underlying trend. Globalization shifts exposuresinto different locations. There's a growing commercial riskexposure in emerging markets that can relate to US companies doingbusiness there that import to there or export to there. So there'sa lot of connectivity.” Additionally the “pressure of profitabilitycoming from low interest rates will continue.”

The reaction to past risk will also have an effect on thefuture. “There are worries that there could be a spike in inflationgoing forward if policy makers are not willing or able to take backall that stimulus that they put out in the market.”

The bottom line is this: “It's a high risk environment for theimmediate future. The industry has to position itself withconservative and risk-averse strategies and focus on underwritingenterprises. These exposures need to be understood and quantified.”Holzheu's session will help ACE attendees do just that and preparethem create a path through the complexity.