BRIGHTON, England — The entry of nontraditional third-party capital — particularly invested by pension funds — into the primary insurance market is good news for buyers and could reduce underwriting cycle volatility, according to broker and insurer executives.

Because some of that new capacity could remain in the market for the long term, that spells good news for insurance buyers, they said.

“I question whether there is ever going to be a hard market as we've seen in the past,” said Stephen P. McGill, group president of Aon P.L.C. and chairman and CEO of Aon Risk Solutions.

The effect of the entry of third-party capital, such as pension fund investment in the reinsurance industry, has been “quite profound” and could signify additional, sustainable capacity and new ways to meet insurance buyers' needs, he said.

Influx of new capacity is “a very significant change and should benefit buyers of insurance,” said Steve Hearn, deputy CEO of Willis Global and deputy CEO of Willis Group Holdings P.L.C. in London.

The influx of new capital was the topic of broker and insurer CEOs gathered for a panel session at Airmic Ltd.'s annual conference in Brighton, England, in June.

And Mr. Hearn said in a post-panel interview that he thinks the new capacity from the pension funds will remain long term, possibly branching out from their initial investment in property catastrophe business into other lines as their familiarity with the insurance industry grows.

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Pension funds are driven by the need for yield, said John Doyle, CEO of global commercial insurances for American International Group Inc. in New York. And while their appetite to participate in the insurance market may rise and fall with market conditions, the fact that the amount they are investing is so small compared with their overall capital base means pension fund capital has the potential to become a long-term participant, he said.

Insurers have noted the trend of third-party capital investing in the reinsurance and insurance markets, said Thomas Hurlimann, CEO of global corporate business at Zurich Insurance Co. Ltd. “It is an additional competitor” for traditional insurers, he said.

Airmic's 50th annual conference attracted a record 875 delegates, 402 of whom were risk managers.

During the conference, Chris McGloin, vice president of risk management and insurance at London-based Invensys P.L.C. succeeded Nicholas Bailey, group risk manager for London-based BBA Aviation P.L.C., as chairman of Airmic.

Helen Hayden, head of insurable risk at London-based supermarket Tesco P.L.C., was appointed deputy chair.

Next year's event will be held June 16-18 in Birmingham, England.