Forum Archive Index - December 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

Someone supplied me with an article:

http://finance.news.com.au/common/story_page/0,4057,3384163%255E521,00.html

 

And I made the following comments:

 

Re QBE, yes, there will be *less risky* business to be done but at much higher premiums!

Not too much concerned about this. Article not very helpful, ie. says that QBE is the biggest participant at LLoyds, but forgets to mention that it
holds 7-8% of the Insurance/Reinsurance market.

 

Four things to remember:
1. The WTC claims will extend over many years and can be offset on an annual basis by much higher premiums.

2. There will be little competition from now on ( as I have mentioned a few times ). As more smaller companies go against the wall ( because of WTC claims ), the rest will have more breathing space.

As you know, this is the second shake-out immediately following that one of 2 years ago.

3. While a few businesses refuse to insure because of too high premiums, the vast majority with debts/ morgages will have to insure because the Bank/Lender tells them to do so. ( And the lender is not paying for this ).

4.QBE and others can now afford to "drop the rubbish". Previously, they may have taken some of it on. They will be in "quality insurance" from now on.

5. Businesses now **want** to be insured by the larger companies of which QBE is one. All should have written in war- and terrorist clauses in the new year.

QBE has moved strongly over the last two days with the financial year closing on Dec 31.

Gerry