Dear All,

Responses to the Interim report are due by close of business 12th April.

There are parts of the report that make shocking reading: the suggestion that some brokers and BCMs are saying if premiums go down then their commissions go down, so they'll take their entire portfolio somewhere else; when an insurance company finds it is the cheapest in an area where it doesn't want the business, or be over exposed, they raise their premiums, then the next company finds its the cheapest so they raise their premiums, then the next company.... - get the picture.

And this is part of the actual report:

Box 7.2 Increasing premiums in response to competitor pricing

On observing that competitors had increased premiums, senior management at one insurer quoted:

"We've got so much more upside than I realised. We need to address this but we need to be careful that people don't see it as us sneaking in further increases as part of flood...This makes me happy. I didn't realize we had so much opportunity."

"I believe we need to be able to justify any increases. I can see regulators being interested and 'profiteering' allegations downstream...I'm not saying don't do it, far from it, I'm just saying lets have some good reasons including rising costs...of reinsurance, changing claims patterns and costs, reducing portfolio subsidisation blah blah."

Need I say more?