The gap between the world’s strongest reinsurers and the weakest is likely to widen in the current market, suggests a report from rating agency A.M. Best. The annual review of the reinsurance market notes that it was lack of attention to underwriting and over-reliance on investment gains that brought reinsurers to their dismal results last year not the impact of September 11. “The previous run-up in the stock markets lured the reinsurance community into a false sense of security and led to a general relaxation in operating standards,” states a Best release. “The capital gains recognised form equities, which represented half of the industry’s surplus, provided an earnings buffer for the deteriorating underwriting conditions.” Since September 11, 2001, there have been several withdrawals from the market, both voluntary and involuntary. As well, new start-ups have cropped up generally domiciled in Bermuda to take advantage of the hardening market. Nonetheless, Best predicts the world’s strongest reinsurers will grow in the current market, and the disparity between the strong and the weak players will increase. The strong will be able to take advantage of marketshare gained in the soft market as they drive up prices, while the weak will continue to suffer under the stress of the market.