“On the casualty side, things are even more tight,” Holzheu says. Plagued by a slow economic environment, “low interest rates are affecting profitability very adversely. And the claims environment has been more benign in the past.”

While the information itself may not be entirely new to P&C insurers, it has far-reaching effects. The implications of these market conditions will form the backbone of Holzheu's session.

Insurers everywhere are asking: is the market hardening? Holzheu says the data shows that we have reached a “turning point of the trend,” but there's “still a ways to go.”

“[The present market conditions] seem to be a manifestation of a longer term and underlying trend. Globalization shifts exposures into different locations. There's a growing commercial risk exposure in emerging markets that can relate to US companies doing business there that import to there or export to there. So there's a lot of connectivity.” Additionally the “pressure of profitability coming from low interest rates will continue.”

The reaction to past risk will also have an effect on the future. “There are worries that there could be a spike in inflation going forward if policy makers are not willing or able to take back all that stimulus that they put out in the market.”

The bottom line is this: “It's a high risk environment for the immediate future. The industry has to position itself with conservative and risk-averse strategies and focus on underwriting enterprises. These exposures need to be understood and quantified.” Holzheu's session will help ACE attendees do just that and prepare them create a path through the complexity.