14 Dec 2005
Swiss Re hosts sixth annual Economic and Insurance Industry forum
14 Dec 2005, 16:06 - New York
Swiss Re experts gathered on December 14 in New York City to host the company's sixth annual Year-end Economic and Insurance Industry Forum. The event, which reviews the major developments of 2005 and provides an outlook for the coming year, was particularly focused on the impact of the active hurricane season on the US Gulf Coast and Florida.
The day's presentations began with a macroeconomic view of the economy from Swiss Re Chief Economist Kurt Karl. The Economic Research & Consulting North America Head said that inflationary pressures are rising and Katrina has aggravated them. He added that in this climate, the US Federal Reserve is likely to continue tightening, raising the Fed funds rate to 5% by mid-2006. Karl also stated that the growth outlook seems solid, and the US economy has weathered the storm of post-Katrina uncertainty.
The Property & Casualty business came next, with an appraisal by Patrick Mailloux, President and CEO, Swiss Re America Corporation. Mailloux outlined the business impact of the 2005 hurricanes as well as their future implications on several aspects of the P&C market. He predicted a stronger demand for reinsurance in the coming year. "A flight to quality will favor large and diversified players," he added.
Americas Catastrophe and Perils Unit Head Andrew Castaldi examined the four largest storms that impacted the US Gulf Coast states and Florida in 2005. The insurance industry, he noted, has the ability to cope with record-setting catastrophes. Castaldi also analyzed modeling strengths and weaknesses, saying most tools are being recalibrated upward, and/or will take into account long term oscillations.
The year-end event concluded with an overview of the US Life and Health reinsurance market from Swiss Re Life & Health America CEO Weldon Wilson. The Swiss Re executive pointed out that the past decade's growth in the life reinsurance cessions was under pressure as clients changed their product mix and increased their retention.
"Mortality expertise and capital management skills are important qualities we can provide to our clients.," Wilson said. "In particular, the securitization of the life business will advance in the next 12 months and life reinsurers will play an integral role in this process."
Outgoing Americas Property & Casualty Head Andreas Beerli hosted this year's event and introduced Pierre Ozendo, his designated successor as of January 1, 2006. As the current Head of Swiss Re's P&C operations in Asia, Ozendo has played a key role in growing the business in that emerging region of the world. Beerli is stepping down from his current role to become Chief Operating Officer of Swiss Re Group on January 1, 2006.