On Jan. 7, I peered into my crystal ball for the likely Top-10 Property-Casualty Insurance Stories of 2008. Read on to see how my predictions panned out, and feel free to comment.

#1–Hail To The New Chief!
While I consoled the industry that former trial attorney John Edwards would not be our next president, and I did predict a Democrat would win, I expected Hillary Clinton to get the brass ring, not Barack Obama. Either way, as I noted, health care reform will now likely be a top story for 2009!

#2–Bottoms Up!
While analysts were pretty confident carriers would maintain underwriting discipline and keep pricing rational, I was not, predicting price cuts to remain deep for all but cat-exposed risks. In fact, double-digit drops in rates were the rule rather than the exception.

#3–Stormy Weather?
After two quiet hurricane years, I said that while I hope Im wrong, I cannot believe the industrys luck will hold up for a third straight season. Sure enough, Ike led a rather active storm season, resurrecting–as I predicted–talk about a national catastrophe fund.

#4–Break It Up!
I warned that Marsh & McLennan would sell off pieces, or perhaps even auction the entire firm to the highest biddermost likely a foreign buyer capitalizing on the sweet exchange rate. As it turned out, not only did MMC remain intact, but its launching a nationwide independent agency.

#5–Bargain Hunters!
I predicted the cheap dollar would attract at least one major acquisition of a U.S. property-casualty insurer by a foreign investor. While Tokio Marine did buy Philadelphia Consolidated, I expected more of a blockbuster deal.

#6–Is Noah Covered?
I was right that Democrats in Congress would fail to add wind coverage to the National Flood Insurance Program with President George W. Bush in charge, and to expect no more than a bare-bones extension. I doubt President Obama will be any more open to the idea.

#7–TRIA Revisited?
While noting that Rep. Barney Frank and other Democratic leaders wanted to expand the governments terrorism reinsurance program to include events involving weapons of mass destruction, I correctly guessed that such a gambit would never get past President Bush. The idea was never even raised.

#8–Under The Radar!
I figured after pummeling insurers in 2007 over treatment of Hurricane Katrina claimants, Washington would be preoccupied with the subprime crisis and would let insurers off the hot seat. I certainly didnt figure on AIG ending up at the center of the subprime crisis.

#9–Storm Clouds Hit Sunshine State!
I predicted a day of reckoning would come this year in the war of words between Florida insurers and lawmakers over whether carriers were doing enough to lower property rates. But with no major storm hitting Florida, judgment day was postponed on whether the states reformed catastrophe system would survive another big event.

#10–Foreign Reinsurers Welcome!
After New York and Florida went rogue by proposing their own systems allowing foreign carriers to write reinsurance without necessarily having to put up 100 percent collateral, I expected the National Association of Insurance Commissioners to finally bow to marketplace realities and head off regulatory chaos by approving a nationwide standard. While the NAIC did indeed okay a framework for a new reinsurance collateral system this month, the devil will be in the implementation details that are yet to come.

Special Reports /

20-20 Hindsight On Sam's 2008 Predictions

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