The trend of increasing insurance prices is likely to continue, say industry experts.A panel at the Bermuda Captive Conference, which opened yesterday as a virtual event, unanimously agreed that the hard market would have staying power.Patrick Tannock, chief executive officer of insurance operations, XL Bermuda, said: “I think we have all of the ingredients for a much more sustained firming of the market than we’ve had in previous years.”Four drivers were traditionally thought to lead to a hard market, he added: sustained loss activity, some retraction of reinsurance capacity, new surplus requirements and pricing discipline.All factors were present, he said, but there are also additional pressures, such as low interest rates, which mean insurers make less from their investment portfolios and so are more dependent on underwriting activities to generate profit, and also the uncertain impact of the Covid-19 pandemic.“We, as an industry, can’t really get a handle on our reserves with respect to Covid-19,” Mr Tannock said. “Some insurers are taking their reserve charges early and others are deciding to wait and see. We don’t know where the losses are going to come from, but they’re going to come from somewhere.“So it’s a time of great uncertainty and as long as we continue in a low interest rate environment, that will continue to fuel consolidation among some of our peers as well.”Judy Gonsalves, division president, Chubb Bermuda, said the soft market had lasted so long that the industry needed several years of price strengthening to make up lost ground. Ms Gonsalves said: “We’ve had ten-plus years of loss-cost trends exceeding premium rates. And loss-cost trends are not flattening or declining, they are continuing to increase. “So we need more than one to three years to make up that delta. “I think over time rates will ease off in certain lines of business and I think they have a long way to go in others.”She added: “Underwriting discipline and pricing discipline is here to stay.”Capacity was available, however, she added, and conversations aimed at finding solutions to enable buyers to acquire the large limits they had been used to getting from the Bermuda market were happening. Also on the panel was Al Gier, global director, corporate risk management and insurance, General Motors Company, who gave a buyer’s perspective on rising insurance rates.“If that’s going to be the situation, where to purchase the same programme as last year and the year before is going to cost a lot more money — for good reasons — then we have to consider whether we still want to buy the limits we have done, or do we want to redeploy our premium to put more into the coverage that we feel is more valuable to us.“We’ve been in a soft market for a number of years, and not to say we got lazy but we assumed certain things would happen. Things have changed. “We’re going to continue to buy insurance, but we just have to do it with more precision in the way we manage the whole portfolio of coverage.”Mr Gier is also president and chairman of General International Ltd, the car maker giant’s Bermudian captive insurer.The panel was in agreement that captives would play a growing role in the market, as rising commercial insurance rates made the use of some self-insurance more attractive.John Turner, chairman of Ed Broking Bermuda, said: “We see the hardening market continuing. There will be new players and we see that as a positive. “We do think there’s a going to be a massive upsurge on the captives and how people work with them. “There is innovation going on, and we expect to be able to play our role in finding capacity and to effectively be solution providers to our clients.”The Bermuda Captive Conference continues today and tomorrow. Registration is free.• For more information, visit www.bermudacaptiveconference.com