New York Gov. David Paterson started a buzz in the market last night by voicing his strong interest in reviving an insurance exchange modeled after Lloyd's of London, which hosted the gala dinner where the governor made his pitch. The question circulating around the room was whether a new exchange could succeed after its predecessor crashed and burned over 20 years ago.
For those of you not fortunate enough to have spent 27-plus years covering this business, as I have, and who might not recall the New York Insurance Exchange, the facility debuted in 1980 as a syndicated, subscription-based market modeled after Lloyds of London, to write both specialized risks as well as reinsurance.
It was conceived during a capacity crunch, but folded seven years later, the victim of a softening insurance market, capital shortages and poor underwriting, among other problems cited by critics.
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