REINSURERS BITING AT PREMIUM BIT

"One of the big things in the cost of reinsurance and it’s a global issue, is what Hurricane Katrina has done. It is generally felt that there is going to be hardening of the insurance premiums within the market," he said.

He said they were at the negotiation process at the moment with their reinsurers, noting that it was much too early to say what the actual impact of that is going to be.

"We know that reinsurers are hurting significantly," he said. Asked what this meant for the regional market, O’Brien said the exposure to losses have been cyclical while the exposure to storms have been random.

He said while they expected a certain number of storms every year, reinsurers are expected to set premiums to cover that, stressing that 2005 was already an exceptional year. Noting that while GHL does not have exposure to the US market, it was the ripple effect he was worried about. He said the company had two different types of exposure, "One is the risk that we take and the other is our exposure to reinsurers who may have to increase our premiums.

But he added, "The reinsurers will increase their reinsurance premiums, it’s the extent of that increase that we don’t know yet."

He said so far the company’s underwriting and risk profiling have been such that "we’ve been insulated from all the catastrophes that have already happened this year."