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In a recent roundtable hosted by this publication, a senior executive candidly revealed that in the late 1990s a certain major international specialist insurance market commissioned a study looking at its competitive position in its core US specialty lines arena.

It had been losing market share and it wanted to know if this was just a cyclical thing or if there was a fundamental problem of relevance that needed to be addressed.

Consultants were rounded up and paid handsomely, the CEOs of carriers, brokers and clients alike were interviewed and reams of data were compiled and collated.

Eventually, a report was produced and its conclusion was that indeed this market was slowly losing relevance. The march of consolidation was upping sophistication and financial firepower in local and national carriers and its competitive position was being gradually squeezed.

In the long term, the boffins predicted this market would fall down the rankings and would have to reinvent itself.

Of course, 15 years later this has turned out to be utter nonsense and the organisation continues to play an unrivalled and pivotal role on the US stage.

The lesson is that whenever a trend is reaching its peak or trough, many mistake the move for a paradigm shift that requires a reinvention on the part of those affected.

The latest manifestation of a long-term trend to set anxieties flaring is the news that Generali is to centralise outwards reinsurance spending at its Trieste headquarters.

Reinsurers and their brokers worry that this is the latest sign that they are losing relevance in the world and are consequently missing out.

Global programmes are nothing new - Axa, Allianz, Aviva ,RSA, Zurich and Chubb are all there already - and the process of rationalising reinsurance spend and reducing "leakage" has continued inexorably ever since.

In the short term some numbers are likely to affected negatively, but ultimately we would argue that there is less cause for long-term concern.

For one, as insurers have consolidated and gone global so too have their reinsurers.

And if we think insurers and reinsurers have globalised, then their reinsurance intermediaries have been way, way ahead of the game.

Twenty years ago, for an independent Spanish, German or French reinsurance broker, the loss of the Generali account to Trieste would have been a disaster.

These days that broker is almost certainly part of one of the "big three" and running as a component of a global profit and loss account.

It is also worth noting that generally the bigger a carrier becomes, the more its relationship with its best brokers deepens.

The other cause for comfort is that global programmes always create gaps for enterprising fac and treaty brokers to fill.

Cyclical opportunities
And let us not forget that in business the process of consolidation is as cyclical as the rest of the market. Consolidation ultimately leads to fragmentation and new capital formation as entrepreneurs exploit high-growth gaps in the market that the industry giants are too unwieldy to exploit.

At the same time, increased cedant retentions at the bottom of a soft market can only lead to greater retained losses, greater repentance and greater reinsurance demand when the market eventually turns.

In short, there is no need to panic or fret about the future relevance of the reinsurance product.

Keeping the faith and your powder dry is still the best way of making sure you've still got it when opportunities inevitably knock once again...