New risk exposures such as terrorism are forcing insurers to improve their own risk management, according to a panel of senior industry executives in New York. Speaking at Standard & Poor’s 19th annual insurance conference last week, industry leaders discussed critical factors such as credit losses, low investment yields, cut-throat competition and runaway claims costs.

 But despite the talk of challenges insurance companies are feeling more optimistic with prices firming, investment values rising, and demand increasing.

Chief executives from both the property/casualty and life insurance industries participated in the discussion. Jay Fishman, CEO of newly merged insurance giant St Paul Travelers, was just one who spoke about the impact of asbestos claims on all US industries. Last month St Paul Travelers executed an agreement substantially resolving all common law asbestos-related direct actions pending against it. The settlement, which has not received court approval, would bar future direct legal actions against Travelers.