The Good Old Days
It seems like just yesterday. The broking team was assembled in the conference room with the quote tracking sheet on the big screen and our London colleagues on the spider phone. There was a healthy 15% spread from lowest to highest quote. The market clearing price was up for debate. In soft markets it hovered around the lowest quote and in the hardest of markets it floated up to just above the average quote.
That was when firm orders were viewed with finality – it was when gamesmanship stopped and stamps went down. The vast majority of programs were completed with the first and only firm order. The goal for authorized lines was to be somewhere between 95-105%, knowing that a little begging may be required to get a deal home. Landing in this small window meant no money was left on the table.
While we remember those days with fondness, the industry is in a period of change. The single firm order system has certainly suffered flesh wounds over the years, but this renewal season marks the official demise of concurrent pricing for catastrophe reinsurance programs. Concurrency across the board, even on non-catastrophe placements, is faltering; but that is a topic for another day.