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Ready or not: although the post-Sept. 11 market appears to give weaker insurers a respite, they need to make action plans to fight for their survival. (Market Competition: Property/Casualty).

Article Excerpt
In the midst of an over-capitalized property/casualty industry that for several years made many U.S. property/casualty insurers vulnerable to failure or acquisition, all insurers waited and prayed for signs that a "turn" in the market had arrived-that very competitive pricing was a thing of the past and that industry profitability and revenues were rising. That has all changed.

The terrorist attacks of Sept. 11, 2001, seem to have taken care of the industry's excess capacity. Interestingly, however, the larger and stronger companies appear to have been impacted the most, an unexpected outcome.

The "turn" had probably already arrived by Sept. 11. Rates were rising strongly before then and have risen even more dramatically since. While many property/casualty executives are now looking forward to improved profitability, they have almost immediately begun worrying about the future. Conversations these days seem to question:

* if higher rates will be short-lived

* if future terrorist acts or catastrophes will more than offset any rate gains in the marketplace; and

* if the future is bright or if this is but a brief upturn before the market returns to the highly competitive state that existed prior to Sept. 11.

Pre-Sept. 11 Performance

The key to understanding what is likely to happen next, and what it might mean for a company's strategy and tactics, is understanding the competitive economics that were driving the market prior to Sept. 11. How have they changed, if at all, and how will they impact the competitive playing field over the next several years?

A critical element...