Underwriting cycles becoming line specific.

The underwriting cycle, always a challenge to reinsurers, is evolving in ways that will test their ability to prosper in a market that itself is becoming more difficult and less predictable.

"Perhaps the shape of the cycle has changed, but the cycle is very real indeed," Henry C. V. Keeling, chairman of XL Re Europe, said at the Baden-Baden Reinsurance Symposium.

Michael Handler, chief executive officer for continental Europe with brokers Guy Carpenter & Co., said that brokers should be seeking to help their clients develop their risk-management skills, as cycles become flatter with longer curves and "more line specific."

The intermediary, Handler said, should strive to be viewed by the client as adding value rather than as a cost. "I see the ultimate picture of the intermediary becoming a key adviser in the integrated financial-services industry," he said.

The broker, Handler said, should be able to advise the client in such areas as the effects of increased retentions by insurers, alternative products, regulation and benchmarking.

Underwriters, Handler said, also will need help in addressing such issues as regulation, diversification and the rapid move of capital into the industry.