There continues to be insufficient capital dedicated to catastrophe risks, he noted, adding that capital market vehicles--such as sidecars, which are capital vehicles created to cover an individual risk--would continue to be important components to solving coverage issues.

"New capital is not sufficient to meet demand for this new capacity," said Mr. Davis, adding that the capital markets can only be counted on for financing so long as they receive record returns from the hard catastrophe market.

Gail Norstrom, managing director, Aon national property practice, said when it comes to looking for pricing benchmarks, accounts with natural catastrophe exposures, but no hurricane losses, have seen increases of greater than 50 percent.

While these catastrophe risks with losses have seen increases well over 100 percent, for layered accounts, Mr. Norstrom noted, the second, third and fourth excess layers were experiencing sharper increases than in the past.

Average rate increases for accounts Aon monitors are at 33 percent, he said.

However September and October showed some moderation and may indicate "the cooling of the upward pricing we have seen over the past year," Mr. Norstrom advised.

Large accounts (average premium of $7 million), he went on to say, saw the sharpest increases, while smaller accounts experienced less increase. The exceptions, he said, were risks in the Southeast with hurricane exposures, and California accounts with earthquake exposures.

Sixty-six percent of Aon's property accounts experienced increases, Mr. Norstrom added.

Mr. Tobin said insurers do not see the hardening in the property market as cyclical pricing, but instead, other factors are producing the increase, and will continue to do so in the future.

Pressure from rating agencies to keep adequate capital to cover their risks, increased cost for reinsurance, and changes in models that have increased loss estimates are conspiring to keep premiums high, he explained.

With predictions of record profits for 2006, it should produce some relief for customers, he said. One carrier, FM Global, is giving credits to its long-term customers. As a result of their improved financials, pricing may not see dramatic decreases, but there may be increased competition that should help customers, noted Mr. Tobin.

"We are not going to see catastrophe pricing return to pre-2005 levels anytime soon," Mr. Davis advised despite some signs of optimism.

On the issue of terrorism insurance, he said the recent election results may improve the prospect of passage of some type of federal backstop program.

Prior to the election, Aon felt passage of an extension or a new backstop was 50-50, but a Democratic Congress has improved those prospects, he said. However, the Bush administration will still need some convincing to prevent the president from pulling out the veto pen, he added.

A replay of the seminar titled "U.S. Property Market Overview: Making Sense of the Maelstrom" is available online at www.aon.com/webseminars.