Would a significant portion of the insurance industry become insolvent in the event of a large catastrophe involving $50 billion to $100 billion in insured losses? That was the question being addressed by Mark Fiebrink, senior vice president and chief actuary of Nationwide Insurance Companies, during the Bermuda Insurance Symposium session on property catastrophe issues, yesterday.

Mr. Fiebrink said the brunt of a catastrophe involving billions of dollars in insured losses would fall on primary carriers. He repeated one estimate that it could make 36 percent of insurers insolvent with a lot of unfunded claims.

Panelists were discussing a hot and current topic in the industry today: Will today's property catastrophe market survive the Big One? Weighing in on the subject was Scott Moore, chief financial officer of Bermuda `cat' Partner Re, the largest capitalised specialist property catastrophe reinsurer in the world.

Reinsurers have been concerned with this subject because it was just such an event, Hurricane Andrew, that sucked capacity out of the market, leading to the void that was eventuallly filled with the multi-billion dollar capitalisation of the Bermuda `cat' reinsurers.

Mr. Moore discussed how recorded catastrophes have been increasing in terms of the size of the insured damage, and also in terms of their frequency.

The Kobe earthquake was a $100-billion event, although not a very large insured event.

Moderator of the panel Henry Keeling, executive vice president and chief underwriting officer of Bermuda-based Mid Ocean Re, commented that such a large event in Japan could potentially have an impact on the investment portfolios of some companies there, because some of the firms invest their portfolios in their own clients' property. And, as Kobe demonstrated, a lot of the property was not insured.

Looking at the overall market, Mr. Moore said that exposures were growing because more people were buying insurance. He pointed out the growing capital base of the Bermuda market and agreed that reinsurers were acquiring more expertise and knowledge. He said issues for them included managing exposures with an eye on the capital base, and discipline in underwriting and pricing.

Mr. Moore said, "The next large event could be a big one, but it could also be a series of big events, instead of just one. How would Bermuda reinsurers handle it? We think responsibly. Some better than others. But the real issue will be how the primary insurers handle it.'' How Island's insurers would cope with a major catastrophe From Page 35 He disagrees with those who do not believe there is enough capacity in the market today.

He said, "There is a less likelihood of a pull-back from the market, like after Hurricane Andrew, because people know that those who stayed in the market have made a lot of money since then.'' He did raise some concern about the regulatory environment after such an event, or series of events, by noting that in the heavily-regulated US environment, there were more likely to be "fire drills.'' Mr. Fiebrink believes that insurers need to look more closely at a lot of peripheral issues that would better enable them to assess the potential of total claims.

His advice included checking on the strengths of their reinsurers, including the state of their invested assets, and what effect say, a 30 percent correction in the stock market, for example, might have on those assets.

He too, said, "Our company will be able to handle the big one, but I'm concerned about what might happen to the regulatory environment after a significant event.'' Reinsurance broker Mark Hvidsten chairman of Minet Reinsurance, said brokers took a holistic approach and were now more involved in various aspects of advice to clients involving financial information, than during the days they were simply distributors of risk.

He talked about the potential for calamitous effect as a result of a collapse of investment portfolios simultaneous to a significantly insured event.

Mr. Hvidsten said, "Brokers are more qualified to help insureds protect themselves from being wiped out by a large event.'' He said increasing the use of aggregate cover and multi-year policies were some of the ways being used to better manage exposure.

He discussed whether or not two sizeable events within a year would mean terminal distress of any magnitude, and said more attempts were being made to determine how many catastrophes have to occur before losses become untenable, as opposed to simply how large they have to be.

Mr. Hvidsten was confident about being able to handle the big catastrophe event, because he said more attention was being paid to how to deal with it.

UPBEAT PANEL -- There was significant optimism at the Bermuda Insurance Symposium at the Southampton Princess on Tuesday about the prospects for Bermuda's future in the insurance and reinsurance industry. Discussing future trends during a panel discussion entitled "The Bermuda Connection'' were Brian Duperreault, chairman, president and CEO of ACE Ltd.; Jean Kennedy, director of risk management of Minneapolis-based Medtronic Inc.; Donald Kramer, vice chairman of ACE Ltd.; and Steven Gluckstern, chairman of Centre Reinsurance Companies & Zurich Reinsurance Centre Holdings.

BERMUDA INSURANCE SYMPOSIUM BUSINESS BUC