The consensus is the ‘perfect storm’ is brewing for run off, with the credit crunch, cat losses, possible market consolidation and the looming implantation of Solvency II on the horizon.
In recent years, there has been very little activity in the run off area, with increased competition and improved underwriting squeezing profit margins. However, in times of distress, those who deal in troubled waters can often find ways of making good returns – and the run off specialists are gearing up for a busy year in 2009.
While most think it is unlikely that many whole companies will be forced to close their doors, pushing their business into run off, the consensus is that everyone will be looking carefully at their books of businesses – and some less profitable lines will be placed in run off. Click here to read full article