AIG President Maurice “Hank” Greenberg and Zurich CEO James Schiro have called for insurers to avoid dropping premiums as profitability rises and competition returns to markets. Speaking in New York at the property-casualty industry’s annual CEO conference, Mr Greenberg said insurers need to “hold the line on pricing and not give in to excessive competition”. He agreed the US market is softening rapidly, and warned that it could be catastrophic for the industry while it remains under-reserved.

Mr Schiro, who called for insurers to “resist being pushed into a soft market we’re just not ready for”, said combined ratios have been above 100% for 20 years. “It’s more important than ever to remember that we must earn the cost of our capital. We have to remind everybody to stop at the stop signs.”

But other CEOs at the meeting suggested the market softening has already begun in the US, with WR Berkley – founder of the insurance company he named after himself – noting: “What drives the insurance cycle is people thinking they are in the ‘insurance business’ and thinking they need to get bigger. We are in the business of making money.”