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To: Bucky Katt who wrote (38328)	10/28/2008 8:30:24 AM
From: joseffy	Respond to of 48461

Insurers plan to raise rates to recover financial crisis losses Insurers are preparing to put up their rates to recover a sudden increase in losses from the financial crisis and a worse-than-expected hurricane season. By Yvette Essen, Insurance Correspondent 27 Oct 2008 telegraph.co.uk Munich Re, the world's biggest reinsurer, said it expected "significantly higher prices" with premiums percentage increases "definitely going into the double-digit range". Its comments that rates are heading north were echoed by Lloyd's insurer Hiscox and Lancashire Holdings, a marine and energy insurer which was founded following 2005's hurricane season. The decision to lift premiums comes just a month after the Monte Carlo Rendezvous, the industry's biggest event where underwriters and brokers discuss prices and trends for the following year. At the gathering, premiums seemed to be falling for another year due to few losses in the industry. However, Munich Re said things had changed in the past few weeks, with the financial crisis increasing the demand for reinsurance. It said that since Monte Carlo at the beginning of September, "the world's ten biggest insurers in terms of market capitalisation have alone lost more than a quarter of their market value". The German-based insurer said man-made losses - such as personal injuries - soared in the first-half year from €71m (£57m) in 2007 to €352m in 2008. "This development is just one example of the changing risk environment," it said. "Another is the persistent trend towards higher costs for severe personal injuries in motor liability insurance, resulting partly from medical advances and partly from social changes, such as care by professional providers rather than by members of the family." Lancashire said it had experienced its first quarterly loss since it was created in 2005 due to the summer hurricanes and financial market turmoil. Richard Brindle, chief executive, said "there is now no question that the market has turned" as it took a $150m hit for storms including Hurricanes Ike and Gustav. He added: "If the current malaise afflicting all financial markets continues throughout the fourth quarter, we can expect a sea of red ink for the industry's full-year results." Insurers are currently submitting requests to Lloyd's for the maximum amount of business they can write. Hiscox, which currently has a capacity of £700m said instead of decreasing its capacity to £550m as previously planned, it plans to increase it to £750m for 2009. It has also applied to Lloyd's to start a new syndicate to insure up to £60m of risks as "the recent turmoil in the financial markets has provided opportunities".