Time is running out for balance sheet repairs
In retrospect, the U.S. casualty reinsurance market of the late-1990s is a case study for the risks inherent in the property and casualty reinsurance business.
The combination of soft-market pricing and adverse claim trends arising from medical and social inflation, as well as expanded coverage, has led to significant increases in loss reserves for casualty business written between 1997 and 2001. The reserve charges taken for these legacy exposures during the past few years have forced several firms into run-off, including Gerling Global Reinsurance Corporation of America, PMA Capital Insurance Company and Converium Reinsurance North America.
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