Lloyd's Sees Price Cycle As 2005 Top Issue

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NU Online News Service, April 20, 3:52 p.m.EDT?Lloyd's of London underwriters see managing thepricing cycle as this year's most important industry issue,according to the market's annual opinion survey.[@@]

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The survey of 102 Lloyd's underwriters found that 44 percent ofthose interviewed believe managing the cycle is the most importantchallenge to address this year. Achieving "contract certainty" wascited as the next most important issue, followed by the need toachieve transparency and disclosure.

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"Given Lloyd's emphasis on the discipline needed to deliver anunderwriting profit, it is reassuring that underwriters in themarket see managing the cycle as the single most important issuefor the industry," commented Julian James, Lloyd's director ofworldwide markets.

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The majority of the market's underwriters, at 84 percent, saidpricing would also be at the forefront of insurance buyers' mindsduring 2005. In contrast, only 4 percent said fallout from New YorkAttorney General Eliot Spitzer's investigations would be at theforefront of buyers' minds.

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The general feeling among underwriters, the survey said, wasthat regardless of all other issues, cost is currently thedetermining factor for insurance buyers.

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Lloyd's underwriters, the survey found, are bullish on theChinese market. When asked which region has the most opportunityfor growth, 25 percent of the respondents listed China as the"foremost area of business opportunity." Additionally, nearly 60percent said they believe China to be the market that offers thebiggest new specialist opportunities.

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Mr. James said: "The fact that underwriters at Lloyd's pinpointChina as having the greatest growth potential demonstrates whyLloyd's is putting so much time and effort into securing anon-shore reinsurance license there."

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Other key findings include:

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? More than half of underwriters interviewed believe thatregulators will be the group with the most powerful impact on theindustry in 2005. Of those who believe the regulators will be themost influential group, 54 percent think the impact will benegative, while 43 percent think it will be positive. Brokers andmedia were seen as groups having mostly negative impact.

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? Some 32 percent of underwriters interviewed thought that theindustry's overall reputation with insureds was "poor," while 61percent said it was "good." Nearly 60 percent thought theindustry's overall reputation had stayed the same in the pastyear.

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? Underwriters said they believe the increased transparency anddisclosure and better communication with those outside the industrywere the factors that could help most to strengthen the industry'sreputation.

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