A new report is questioning whether the capital flowing into the insurance industry following record insured losses in 2005 will be enough to satisfy the marketplace.
The point is raised in this week's ReAdvisory report for reinsurance intermediaries entitled “The 2005 Hurricane Season in Review.”
“With the increasingly conservative view taken by ratings agencies and forthcoming catastrophe model changes, one can question whether the industry's capitalization at the start of the 2005 season will be viewed as adequate in hindsight,” the report stated.
The report said it remains to be seen whether the capital being raised by insurance interests is enough to avoid a capacity shortage during 2006 in the face of modeling and rating method changes.
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