The soft market in general insurance: is a capacity-cull or evolutionary extinction coming?
Last month, the Prudential Regulation Authority (“PRA”) produced a number of publications addressing the state of the general insurance (“GI”) market, and what consequences might flow from a major loss event affecting the market more broadly or as a whole – a “market turning event” (“MTE”). There was clear recognition of the possibility of insurers going into run-off or even becoming insolvent:
“… some in the industry talk of the need to have naïve capital and capacity cleared out of the market …”
(David Rule, Executive Director of Insurance Supervision, speech on 21 September – “DR”)
This article focuses on the above speech, another by Chris Moulder, Director of General Insurance, on 28 September (“CM”), and the general points in Consultation Paper CP 32/16 (“CP”).
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.