"What was the reason for that in 2000? Maybe it was the technology bubble, corporate scandals, and maybe a general gloom of the world economic situation," he said.

"Whatever it is, it was still going down at the end of 2002 and it hasn't come back very much today, and it has a major impact on the balance sheet of the insurance industry."

Additionally, interest rates, which are currently at a 40-year low in the United States and a 50-year low in the U.K., will remain that way for some time, Mr. Coomber predicted.

For these reasons, he said, the insurance industry is extremely focused on improving combined ratios and achieving underwriting profit.

Zurich, Switzerland-headquartered Swiss Re earlier reported a combined ratio of 104 percent for its Property & Casualty Business Group for 2002, down from 110 percent the year before.

The goal for this year, Mr. Coomber said, is to bring the ratio down even further, to a profitable level below 100, which will be achieved largely by repricing in 2003 renewals. "We expect the hardening market in the p-c sector to continue for some time," Mr. Coomber said.

He also observed the turbulent times that the insurance industry has been facing also became an impetus for improvement and change.

The highest-ever loss level in 2001, Mr. Coomber said, led to emphasis on technical results. Waves of corporate defaults and scandals created sensitivity to corporate governance. And growing litigious environment, combined with "unreasonable rewards," he said, prompted increased focus on contractual language and risk management.

Another topic addressed at the Swiss Re forum was the overall cost of catastrophe losses in 2002 for insurers.

Werner Schaad, chief underwriting officer at Swiss Re's Property & Casualty Business Group, said natural catastrophes and man-made disasters cost non-life insurers $13.5 billion worldwide last year.

Breaking that result down, he said, natural catastrophes caused the majority of losses at $11.4 billion, while man-made losses were $2.1 billion. The overall loss was much lower than the 2001 figure of $35 billion, and the loss makeup also marked the return of natural catastrophes outweighing man-made disasters after 2001, when the world saw costly 9/11 terrorist attacks.

Commenting on natural catastrophes, Mr. Schaad added that, in 2002, while property losses were below the long-term average, flood losses cost insurers a record $4.1 billion.

"The economic losses caused by the floods are significantly higher than the insured losses," he said." Flooding is the growing challenge in catastrophe insurance, but it presents opportunities for growth and the possibility of fruitful public-private partnerships," he added.