2004 Rendez-Vous de Septembre: international flavor increases at the annual gathering of insurers and reinsurers at Monte Carlo.

For Marie-Louise Rossi, this year's Rendez-Vous, Sept. 11-16, was the most international gathering ever.

Rossi, chief executive of the London-based International Underwriting Association, said that a major contributor to the broadening of participation was the collapse of Communism. This, she suggested, allowed countries of Eastern Europe and the former Soviet Union to begin moving toward the global economy.

"It's only through the mid-'90s that we started seeing more and more [countries] coming each year," Rossi said.

The other group of relatively recent participants, Rossi said, is made up of the emerging economies.

"I think the world economy and the world economic dialogue is changing, and the mix at Monte Carlo is affected," Rossi said.

Rossi said that there is concern among delegates about liability issues, "including terrorism, but not limited to terrorism." She suggested that the size of potential risks leads to questions about the long-term sustainability of unlimited liability.

Rossi also mentioned the European Union's reinsurance directive, which, she said, is moving toward passage by the middle to the end of 2005. Implementation by the member states, she said, would then follow over a two-year period.

"It will bring reinsurance into the single European market," Rossi said. "It will create a level playing field for the regulation of reinsurance in the European Union."

The legislation, Rossi said, would have further effects by creating a European standard for international discussions on insurance regulation.

This, she said, could lead to "mutual recognition of insurance regulators" along the lines of a European model. Such an approach, Rossi suggested, could have relevance to negotiations on world trade and influence the debate in the United States on reinsurance issues.

Rossi said that it is "too early to tell" whether the insurers or the reinsurers will come out ahead in the inevitable tussle over reinsurance rates.

A.M. Best: Stalled Rates To Shape Insurance Cycle

The failure of the nonlife reinsurance market to produce rate increases in 2004 will mark the year as decisive in shaping the international insurance cycle and weakening long-term prospects of profitability.

This is the view of A.M. Best Co., contained in its "Special Report on Global Reinsurance." The report was presented at the 2004 Rendez-Vous de Septembre.

"We make no secret that our view on current profitability is that it's disappointing," said Jose Sanchez-Crespo, London-based general manager of A.M. Best Europe Ltd.

"This cautious outlook," the report said, "remains despite the improved results reported during 2003, after two years of a hard pricing environment."

Pressure on reinsurers with U.S. casualty exposures, chiefly in asbestos and environmental risks, to strengthen their reserves also helped dampen results.

A.M. Best discerns a stronger commitment among reinsurers to provide greater transparency and more information, while remaining alert to a desire among clients for lower prices.

Diversification has become more of a priority among cedants. A.M. Best cited the exit from the market in 2003 and 2004 of such reinsurers as Gerling, PMA, Hartford and Gothaer Re.

Larger reinsurers, the report said, have shifted from a generalized approach to the market and have begun to tout "core strengths" based on geography or product line.

"Total gross income of the largest 35 global reinsurance groups increased 12.1% to $172.5 billion at year-end 2003," the report said. "Overall positive market conditions continue, with headline rates still attractive by historic standards, but softening."

A.M. Best views the expansion of the European Union from 15 countries to 25 as a potential catalyst of reinsurance business. The report also suggests there are broadening horizons in Asia.