Only a massive event could harden the property insurance market — but for other lines of insurance business there appears no end in sight for the soft market.

That is the view of Brian Duperreault, chief executive officer of global insurance broker Marsh & McLennan Companies, who was speaking yesterday at the Bermuda Captive Conference.

"Look back to September 2008," Mr. Duperreault said. "The financial meltdown caused something like $100 billion to leave the industry and at the same time you had the massive hurricane (Ike) that caused $20 billion to $30 billion in damages.

"Two events at the same time and a massive decline in the industry's assets. And what happened to rates? They didn't move much at first and then they receded."

He added that a decline in economic activity since then had led to a reduction in exposures, leaving the industry with plenty of capacity — a situation which is not conducive to increasing rates.

"I would say the industry is stronger now than pre-crisis in terms of net worth," Mr. Duperreault said.

A prolonged period of low interest rates has left insurers struggling for investment returns. That meant insurers were increasingly reliant on their underwriting for profit. But he did not see that pushing up rates.

"There is too much capacity and that will trump everything else," Mr. Duperreault said.

While a huge catastrophe might force property rates higher, he didn't see anything on the horizon that would push up rates in other lines.

Mr. Duperreault was speaking on the conference's opening panel, which also featured Finance Minister Paula Cox, HSBC Bermuda CEO Philip Butterfield and Bermuda Monetary Authority CEO Jeremy Cox.

The speakers covered a wide range of topics based on the state of the Island's economy and its major pillar, the insurance industry.

Ms Cox said the Island's two main economic drivers, international business and tourism, had gone through varying fortunes.

"Certainly from the tourism perspective, hotel development projects and airline arrivals have taken a beating from the economic downturn, Ms Cox said. Some hotel projects had been halted because their backers had included folded US investment bank Lehman Brothers, but other interested parties were showing real interest. The insurance industry "weathered the storm fairly well". The Island's funds sector had been more impacted, she added, and greater regulation pressure around the world would probably have a further adverse effect.

"As you look at what is happening in the US and Europe, there is still tremendous opportunity for Bermuda," Ms Cox said. "There is great interest in the Bermuda brand and Bermuda is seen as a safe haven. We must continue to raise the bar and position ourselves as a leading jurisdiction."

On a scale of one to 10, she said she would give the Island 7.8 for how it has fared during the downturn.

Mr. Duperreault said Bermuda had fared well, because the insurance industry had fared well. This was a product of the industry's good management and good regulation, he said.

Mr. Butterfield said: "Historically our economy has lagged that of North America by nine to 12 months, so we are probably now in our period of greatest challenge."

He added that he believed the global economy was going through a transitional phase.

"I think we are in a period of true systemic challenge," he said, adding that there had been a transformation to the "socialisation of risk". "Before, we could rely on a small group of entities to get it right, but now we are all in the game," Mr Butterfield said. "It's important for us to let policymakers know what our views are."

Ms Cox said: "What must go hand in hand with socialisation of risk is speed of deliberations. We don't have the luxury of telling the US or the EU that we need more time. We have to bring all the various stakeholders to the table quickly and we don't have time to navel-gaze."

Regulation featured prominently in the discussion and Mr. Cox highlighted the BMA's involvement in the International Association of Insurance Supervisors (IAIS).

"If you don't have a seat at the table, you are going to be dictated to," Mr. Cox said. "You can end up having inappropriate standards or requirements imposed on you."

The BMA was represented on 13 IAIS committees, including the executive committee, he added. Bermuda, with its unique two-part insurance market — made up of commercial re/insurers and the biggest captive sector of any jurisdiction, warranted its seat at the table.

Mr. Duperreault said there should be no doubt of Bermuda's importance in the global industry. "This is one of the most important insurance centres in the world," he said. ""Over the past decade, this has been the locus for the capital that has flowed into the industry."

He added that Bermuda's regulation was "special" in that regulators interacted with the industry, unlike in some other jurisdictions where regulation was done in a vacuum.