Reinsurance And Internationl Risk - Known Knowns, Known Unknowns And Unknown Unknowns

There can be no doubt how hard the sub-prime crisis and the ensuing credit crunch have hit the financial markets. Similarly, insurers and reinsurers have been damaged (some critically so) by their investment strategies. Commentators believe that further damage will follow when the full impact of claims arising from the economic meltdown is felt.

Human nature will lead investors to look for someone, anyone, to blame for negative investment returns. Invariably, investors' fingers will point at those with whom they have a direct connection and more particularly those with deep pockets, for example intermediaries and financial advisers.

Already this year, the Financial Services Authority has acted against advisers regarding the mis-selling of self-certified mortgages and various lenders regarding PPI mis-selling. These actions may yet lead to legal proceedings, in the form of either common law/statutory misrepresentation claims or claims based on regulatory