Friday, August 20, 2004

I'll believe it when I see it

FT.com reports that the Zurich CEO doubts a return to price cuts.

James Schiro, chief executive of Zurich Financial Services, said insurers had learned the lessons of the 1990s and would maintain pricing discipline, even if business conditions weakened. But Mr Schiro recognised investors' scepticism - reflected in current low share prices.

It's easy for the chief to say, but at the ground level, there is price competition every day. I think it would be a major change from some of the behavior we've seen over the past few years. Underwriters and program managers are still under pressure to produce results. If your renewal is at the end of the month, be sure to ask how they're doing on their budget. That said, there are companies who have discipline, but that's been a part of their culture for awhile. I don't think you change that overnight.

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