"Go back to basics. Make up your mind whether you're a short-term buyer or long-term buyer," said.

History has shown, he said, that the [hard market] trend will reverse itself. "In the long-term-view prices will average out," Mr. Falk said.

Risk managers also should "look at their overall risk landscape and assess which risks are insurable and which are non insurable," he explained.

The insurable risks, he said, should be analyzed to decide how much to retain, how much to transfer and how much to finance.

Regarding non-insurable risks, he said, "you can see if some of the alternative solutions in the market would help in managing those risks."

He explained alternative solutions as including contingent capital, finite solutions, credit solutions and CAT bonds.

Mr. Falk said risk managers and treasurers are working more and more closely together and have similar goals because whether risk is traditional or financial, "it's all risk."

"They are basically talking about the same thing: ?how do I manage the risk for my company? Do I transfer it, do I finance it or retain it,'" he said.

The financial manager, financial officer or treasurer, he explained, looks at hedging and credit lines and the risk manager looks at transferring or retaining. "But if you throw it all into a basket, in the end it comes to the same thing: ?how is our company exposed to these risks that we have identified?'"

As to whether the current cycle will last, he said, capital could influence a shortening of the cycle, depending on how much new capital is coming in.

"We've seen $15 billion-$20 billion," he explained. "But we believe that is still only a percentage of the capital that was destroyed in the previous years. So we will have to see what the influence of this new capital will be."

He continued that "if there is more capital to come we can envision a shortening of the cycle."

A pessimist, he said, would say that "the cycle started in 1996, for the soft part, and it's now towards the end [of a five-to-seven year cycle]. We only have one year left to recover."

An optimist, on the other hand, would say that, "it's only the start of a new cycle so we still have some time to recover ground," Mr. Falk said.

He added that the hard cycle "really got going in 2001. So if 2001 was the first year of the hard cycle we are now in the second year, which gives us a bit more time."