NU Online News Service

SEATTLE --In the wake of Swiss Re's June purchase of GE Insurance Solutions, the chief executive of the expanded U.S. operation said he is pleased at what he has found and the way the two entities have come together.

Pierre Ozendo, chief executive officer of Swiss Re Americas division, said that from due diligence before the purchase, his company knew there were some segments where both companies had a presence, but the overlap in market coverage "was even less than we expected."

Mr. Ozendo was on hand here to do business with members of the Property Casualty Insurers Association of America who were convened for their annual meeting this week.

The expanded Swiss Re operation, Mr. Ozendo said, faces challenges in completing an integration of systems. However, he added, "we're pleased with the merger thus far."

At this point, Mr. Ozendo said, within the merged operation, "our people are one group. There is no 'us or them' anywhere."

Matthias Weber, senior vice president and underwriting head for the Swiss Re Amonk, N.Y. hub, who was interviewed with Mr. Ozendo, said that after the merger it was a surprise to find how similar the companies were in terms of their business culture and their underwriting standards.

On the topic of underwriting, Mr. Ozendo said in meeting with clients at this year's conference, the feedback has been that in the wake of two major seasons of catastrophe losses they have become more cognizant of a need for underwriting discipline at a time when they are increasing retentions.

Mr. Weber said the property-catastrophe market is currently quite hard, with prices rising in 2006 and actually accelerating.

The company examines each risk individually, so he would not generalize on rates, but did say that for some hurricane- and quake-exposed business, rates have gone up anywhere from 100-to-300 percent.

The increased rates have drawn capital from hedge funds in reinsurance sidecars and other new financial vehicles, he noted. But Mr. Ozendo expressed a view that it's not proven these vehicles will be involved for the long term, and are only part of a transition during constriction in the marketplace.

In discussing other market impacts, Mr. Ozendo said his company feels strongly that there is a need for government support against terrorism losses provided by the Terrorism Risk Insurance Act, which expires at the end of 2007.

"We believe a backstop has to be in place," he said.

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