Problems of price and accessibility in the PI cover market will persist because of underlying factors such as market rebalancing by reinsurers in the wake of 9/11, increasing regulatory demands, and issues of "moral hazard" according to consultants to the industry.
The comments have been made at a roundtable organised by the Centre for the Study of Financial Innovation. Ray Brown of Marsh, and Steve Gilbert of – risk management and reinsurance services firms - both pointed out that solving the issues facing those businesses struggling with PI is difficult because often the causes are global in their nature. For example, while events of 11 September 2001 did not cause the imbalances in underwriting supply, it was certainly a catalyst for what subsequently happened as providers looked over their assets and potential liabilities. The result has...
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