Australia Turns Corner After Shakeout In recent years, the Australian insurance and reinsurance industry has been dampened by billion-dollar losses and the subsequent exit from the market of GIOs reinsurance operations as well as the failure of New Cap Re, ReAC and HIH Insurance.

Remaining participants have essentially comprised branch and subsidiary operations of major global reinsurance groups, with QBE Reinsurance surviving as the last Australian-owned material participant. Despite these cycles, the Australian market remains highly developed with sophisticated underwriting skills, new and alternate forms of reinsurance cover, and a high level of reinsurance usage.

In the absence of further reinsurance company failures and major catastrophic events equal to the Sydney hailstorm of 1999, the current state of the market could be viewed as returning to uneventful stability in 2001.

This is far from the truth as the reinsurance sector pushes through premium rate increases while the general insurance industry assesses the dramatic demise of HIH Insurance Ltd., keeps pace with rapid high-level consolidation and reviews the impact of an enhanced regulatory framework.

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