It's like the opening credits of the classic Hanna Barbera cartoon Hong Kong Phooey: Who or what could this super market phenomenon be?
Is it "Frenemies"? Value chain compression? Or is it simply gravity?
Or could it just be a case of the soft market sweats? Could be!
Being a market observer as the autumn conference frenzy unfolds is often enlightening, but it is always exhausting and can be a little bewildering.
At this time of year a dense thicket of analogies grows up, minted on conference stages ranging from the Med through to Colorado, and from old German spa towns to Florida and Singapore. As journalists, it is our job to cut our way through the new crop of slogans that have begun to clutter up the landscape.
It's a linguistic jungle out there and our job is to wield the machetes and carve a straight path towards the truth. Like our favourite 1970s canine martial arts-themed superhero, we don our mask and cape and look to clear excess verbal foliage with a series of well-aimed karate chops.
Now let me look in my Hong Kong book of Kung Fu...
There is too much capital chasing too little risk. The "Frenemies" problem (the new way of describing the phenomenon of reinsurers getting into insurance and competing with their clients) has always been with us - and in both directions.
Don't forget that 30 years ago every insurer had, or was about to open, a reinsurer of some description. Back then, the incumbent pure reinsurers were pretty unhappy about what was going on - their clients were opening up in competition with them and were bringing the market down.
Many prospective clients of the new insurer-owned reinsurers were also unhappy. After all, they spent most of their time competing with the new reinsurance vehicles' insurer parents, so why should they cede them business?
Of course, that trend ended with a lot of red ink, a collective shrug of the shoulders and a realisation that it would be better for everyone to stick to what they were good at. Within a decade most of the reinsurers were either spun off or sold off. With hindsight, it wasn't a genuine secular trend at all, but a cyclical response to a very soft market.
Value chain compression is really the same thing. This one sounds rather scientific, but it just means that people are fighting harder for business than ever before. Since our business is ultimately about finding ways of matching risk with capital, if capital isn't getting hold of all the risk it wants it will find a way of getting there by seeping into someone else's territory further down the line.
And if compression sounds painful, that's because it is.
That's why of the three buzzwords at the start of this piece, the best and simplest one is "gravity". This was coined at our pre Monte Carlo briefing by that well-known mild-mannered janitor of our industry, TigerRisk founder Rod Fox.
He observed that like water, capital simply flows to where it needs to go and the fool that stands in its way is only going to get wet.
The real question is what is this capital going to do when it finally washes away all the barriers to its progress and gets exactly where it wants to go?
My thesis has always been that it will get there, find plenty more risk than it bargained for and then evaporate.
Then risk and capital will rebalance and we may experience that rare and wonderful weightless feeling...
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Mark Geoghegan,
Editor-in-chief,
The Insurance Insider