While he noted that differences between actual catastrophes and those predicted by catastrophe models have been a key topic of discussion in recent weeks, he said, "When you look at this industry and where we've been over the years, the biggest [recurring] issue...is that pricing and assessment of risk don't seem to come together hand-in-hand.

"When you look at the cyclical nature of the market, where the market goes when there is excess capital," he added, "very often there's pressure to put that capital to use. And that in turn drives the results of the industry."

Mr. Mosher began his remarks by describing recent changes in Best's analysis of natural catastrophes for rating purposes.

He said the Oldwick, N.J.-based firm has been evaluating the ability of rated companies to withstand a 1-in-100-year hurricane or 1-in-250-year earthquake for almost a decade, and that the rating firm introduced a stress test for a second event--a 1-in-50-year event--in 2001.

Recently, Mr. Mosher said, Best revised the second stressed event to be a 1-in-100-year hurricane or earthquake, and introduced qualitative changes to loss figures--adding provisions for demand surge and storm surge, among other things.

In light of the changes, he stated, "there will be cases where additional capital will be required to support given rating levels, and the question [is] how will companies deal with that additional capital? Will they view it as needed because of the risk that's there," as A.M. Best does? "Or will they look at this as extra capital they need to put to use?"

"That's going to have a material impact on where the market goes and how the pricing of the market is driven," he noted.

He also suggested that while Hurricane Katrina has had a positive impact on pricing in the property and marine segments, the effects could be fleeting. Unlike the 9/11 attacks, which came at a time when the market had already begun to harden, Katrina hit when the market was softening.

"So," he asked, "is it a changing event in the market, or is it a speed bump" temporarily slowing down a trend of price declines?

Ken LeStrange, CEO of Endurance Specialty Holdings, responded that he believes Katrina was indeed a market-changing event.

"The magnitude of the loss itself and the causes of it, coupled with the frequency experienced over the last two years, are meaningful changes that have to be compensated for in pricing," he asserted.

Still, like the other insurers speaking at the seminar, he suggested there are limits to the ability to raise prices.

While reinsurers used to think that they could adjust prices forward to achieve payback for prior loss payouts, "I no longer believe that's possible," he said. He pointed to the "advent of surrogates" for reinsurance--hedge funds participating in the industry, catastrophe bonds and a new wave of interest in other vehicles--as limiting factors.