Mr. Dreyer noted the expansion of alternatives to traditional insurance, putting captives at about 20-25 percent of the business. He also pointed to the steady (albeit slow) movement toward insurance securitizations. "Is it possible that, ultimately, the traditional insurance company is a dinosaur?" he asked.

He pointed out to his audience of insurance chief executives that insurance company expense ratios haven't improved in recent years. "With ever-improving information...shouldn't we expect that more efficient forms of risk sharing will eventually put insurance companies out of business?"

"That isn't going to happen," Maurice Greenberg, chairman and chief executive of AIG, responded, noting AIG's low expense ratio of 19 percent.

Noting that insurers have to cope with new risks continually, Mr. Greenberg said, "Why would a self-insured group handle the tort system any better than we do?" When non-insurance companies "take on those kinds of exposures, they're dancing with greater risk to their balance sheets. They may be able to handle cars or widgets, but it doesn't mean that they can handle the tort problems any better" than insurers.

Ramani Ayer agreed with Mr. Greenberg that the insurance industry is going to be a growth industry. "If you look at various sectors of the economy, where is the growth?" Mr. Ayer asked. The outlook for growth rates over the next several years in the automotive, airline, telecom and technology industries, he said, lags behind the growth outlook for insurance.

"By and large, the self-insured groups and pooled risks have been the more difficult to place risks," Mr. Ayer said, predicting that the "the pooling of risk and the self-insurance phenomenon" would not "just take off at a rate that basically overwhelms the insurance industry."

"Most times, when risks are pooled by people who are not expert at pooling it, they don't do a good job, the accounting is not proper. The best evidence of that is the workers' compensation State Fund," he said. "We [insurers] end up paying for it twice--when we lose the business and, in some states, when we have to pick up the marbles after the players have left the scene."