The insurance industry led a charmed life in 2006, given the absence of any major hurricane. Peering into my crystal ball, however, I see some clouds on the horizon! Click on to read my predictions for the top-10 stories of 2007–and feel free to weigh in with picks of your own if you believe I've overlooked something.
#1: TRIA Renewed!
This ones a no-brainer, especially with more sympathetic Democrats in control of Congress. However, the industry will be disappointed if they expect a permanent terrorism reinsurance backstop to be establishednot as long as President George W. Bush is in office. Expect a three-year extension to take it out of the presidential election cycle.
#2: Look Out Below On Prices!
Flush with cash from soaring profits, and spared a major surplus-draining hurricane, look for an accelerating soft market in most lines. The bottom wont drop outyet–but underwriting discipline will wane. All bets are off for Jan. 1, 2008 renewals, however, if carriers enjoy another cat-free season.
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