Weathering the after-waves.

The most destructive hurricane season on record is retreating into history, but its effects are far from over. 2006 reinsurance renewals followed the path of the storms as the lines of business directly affected by hurricanes Katrina, Rita and Wilma experienced significant changes in pricing and conditions, while other lines remained relatively flat. Our cover story this month, "Tale of Two Markets" on page 23, calls on experts from major brokerages to explain the dichotomy and predict any more far-reaching effects of the losses from the storms.

One observation shared by commentators is the overall financial health of the industry going into the storm season and the large amounts of capital that flowed into the industry afterward, both of which tend to stave off a hard market. As one said, "Many primary insurers have not been inclined to accept rate increases across the board for reinsurance protection" Others argued that if the market isn't wilting to pay, reinsurers should reject the business. And so the turbulence continues.

On another front, this issue of Best's Review looks at how the alternative risk market was affected by the hurricanes and fends that many think the greatest impact is yet to come. Fortunately, most captives and other alternative risk vehicles made it through the storms themselves relatively unharmed. Substantial losses appeared to be limited to specific industries, such as transportation, health care, oil and energy. The entire market, however, is anticipating the possibility of a hit in reinsurance, and some experts predict a growth in the market. "Delayed Reaction" on page 42 describes what may lie ahead for alternative risk vehicles, including some coverage changes.

Also, Best's Review's annual listing of captive domiciles and regulators appears on page 47.

And in a different kind of storm, competition has heated up among commercial brokers in the fallout from the investigations of New York state Attorney General Eliot Spitzer. "Broker Wars 2006" on page 27 tells who's picking up market share and who's gaining in the talent pool.

Sally Whitney is editor. You may reach her at [phone], Ext. 5340, by writing to A.M. Best Co., Ambest Road, Oldwick, NJ 08858, or by e-mail at [e-mail]. The e-mail address for Best's Review is [e-mail].