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Article: Facing a fragile future: though profitable in 2002, reinsurers face long-term challenges.(Special report: reinsurance)
- Article from:
- Risk & Insurance
- Article date:
- September 1, 2003
- Author:
CopyrightCOPYRIGHT 2003 Axon Group. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Financial strength, pricing discipline, asbestos, terrorism and collateral requirements are just a few of the tough issues facing the world's reinsurance industry as it tries to get back on firm ground after some of its worst years ever.
Even before September 11, years of soft pricing had taken a toll on the industry and the emergence of a flood of new asbestos litigation has now put additional pressure on it. And with interest rates near 40-year lows, reinsurers can no longer count on investment income to make up for past underwriting mistakes.
Reinsurers raised rates sharply after Sept. 11, 2001, to make up for the industry's losses and that had raised ...