Survey of Property-Casualty Executives Suggests New Brokerage Model Will Evolve in 2005

Survey of Property-Casualty Executives Suggests New Brokerage
Model Will Evolve in 2005
Current regulatory environment expected to affect compliance, pricing and
compensation 


NEW YORK, Nov. 30  /PRNewswire/ -- A poll of attendees at The Conference
Group's 16th Annual Executive Conference for the Property-Casualty Industry has
found that executives expect changes in the brokerage and regulatory models to
have fundamental and long-lasting effects on the industry, including downward
pressure on industry compensation, with pricing likely to increase. The
conference is sponsored in part by PricewaterhouseCoopers LLP, Standard &
Poor's Rating Services, Sidley Austin Brown & Wood LLP, Cochran, Caronia & Co.
and The Black Diamond Group, LLC.

Among the survey findings:

Agent/broker compensation will look different in 2005, with 86 percent of
attendees expecting a move away from commissions with profitability and volume
incentives. Forty-six percent of attendees predict broker/agent compensation in
2005 will be straight commission with expense reimbursement, and an additional
40 percent predicted straight commission with no volume-based component.

The survey found that the majority of attendees, 53 percent thought that given
the new regulatory model emerging, federal regulation will receive a big push
in the 2005 Congress.

Regulatory inquiries and public disclosure changes are expected to have an
impact on market share among the top five brokers, with 42 percent of attendees
predicting that intermediaries will lose market share influence.

The survey also identified a paradigm shift in the industry brokerage model,
with 56 percent predicting that the new model for global customers will rely on
a lower price, fewer profit margins for the underwriter and complete
transparency with the client.

The survey revealed that early looks at January 1, 2005 reinsurance renewals
are most likely to include more competitive D&O offerings, with overall renewal
rates declining worldwide.

Additionally, 74 percent of attendees estimated that between 10-30 percent of
SEC registrants in the industry will have a "material weakness" in their
Sarbanes Oxley Section 404 internal control report this year, highlighting
additional compliance burdens for the industry.  A large majority of attendees,
70 percent think that in commercial lines, rates are falling; premium are
rising, which has companies writing increased exposure.

Lastly, while 41 percent of attendees feel that a view into 2005 of the
property and casualty industry will include "more of the same," an almost equal
number, 38 percent felt that 2005 will have strong companies getting stronger.

PricewaterhouseCoopers (http://www.pwc.com/) provides industry-focused
assurance, tax and advisory services for public and private clients. More than
120,000 people in 139 countries connect their thinking, experience and
solutions to build public trust and enhance value for clients and their
stakeholders.

Unless otherwise indicated, "PricewaterhouseCoopers" refers to
PricewaterhouseCoopers LLP, a Delaware limited liability partnership.
PricewaterhouseCoopers LLP is a member firm of PricewaterhouseCoopers
International Limited. 

DATASOURCE: PricewaterhouseCoopers LLP



CONTACT:  Pauline Wilson of PricewaterhouseCoopers LLP, [phone],

; or Beatriz Garcia of Gavin Anderson & Co.,

[phone],  



Web site:  http://www.pwc.com/ 

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