CPD from the school of Spitzer

The festive season promises to bring some much-needed light relief for the industry, from mulling over the implications of Spitzer, the impending switch-on of state regulation and where rate softening will end. But, before raiding the hamper to briefly escape such things, it should be remembered that the industry has seen some encouraging developments during 2004.

While rates have generally softened this year, 2004 saw the industry continue to enjoy profitability. And there are several factors, such as reinsurers' balance sheets and keeping shareholders furnished with dividends, that arguably make rates look reasonably stable for the time being.

Also, in the year that Folgate made its gazillionth acquisition, an impressive amount of work has been undertaken by the industry to comply with the incoming regulators requirements; something that many hope and believe will bring greater levels of professionalism and help improve the image of an industry that, in many ways, has got it but doesn't flaunt it. Commingling was finally agreed and the government, too, made increasingly positive noises in recognition of the compensation culture. The recent comments by Constitutional Affairs Secretary Lord Falconer, who cited new government measures to combat the growing problem, is surely welcome progress (see p10).

But, the closing comment at the end of my first year as editor would be incomplete without mention of Spitzer - one of the biggest events ever to affect the insurance industry, according to Lloyd's US chief Wendy Baker (see p20) But, seemingly like so many things in insurance, this may be a bitter pill and one that brokers seem increasingly resigned to as an opportunity to build client trust for the future. Marsh UK chief executive officer Bruce Carnegie-Brown has urged brokers to communicate values and strategies clearly and address inefficiencies because the industry has been traditionally bad at this (see p6).

Brokers are resignedly starting to nod in agreement that what Spitzer has started may lead to a needed and widespread purging. In last month's PB opinion poll, which asked: Will the Marsh fallout have an impact on UK brokers? A resounding 65% voted 'yes'.

It maybe some time before this bitter-tasting medicine acts as an elixir for the industry but, if there is a genuine desire for it to become more professional - and recognised as such - I certainly hope to be able to recap further encouraging developments this time next year.