NEW ORLEANS--A group of top insurance industry executives shared their views on everything from catastrophe modeling to optional federal regulation of insurance during a Leadership Panel Luncheon last month at the annual conference of the Risk & Insurance Management Society Inc. in New Orleans.

Asked whether there is "real science" to catastrophe models and insurers' underwriting following Hurricane Katrina, Evan Greenberg, president and chief executive officer of Hamilton, Bermuda-based ACE Ltd., said, "There is a science and there is a framework." That fact shouldn't give insurance buyers excessive comfort, however, he cautioned.

"It's a crude science and it's an evolving science," Mr. Greenberg said. "And those models probably are as good as the next cat season."

While noting that there is an "evolution" in risk modeling and insurers' use of such tools in their underwriting, Shivan S. Subramaniam, chairman and CEO of Johnston, R.I.-based FM Global, told the audience that what the models provide is a tool for helping insurers manage their aggregations of risk.

"The thing to remember is that models don't predict disaster," he said. "What they do do is predict what aggregations should be given a certain set of circumstances."

On the subject of supplemental commissions and other forms of incentive-based compensation of brokers by insurers, panelists' views were mixed.

Brian M. Storms, chairman and CEO of New York-based brokerage Marsh Inc., said the subject is one that should go beyond headlines and sound bites. "This is an industry issue, this isn't a broker issue," he said.

Mr. Storms noted that, like others, Marsh is making a "significant investment" in the industry, through its investment in technology to facilitate transacting business between insurer and insurance buyer, for example. "That cost has to be shared," he said.

"Marsh is going to take it's time with this issue," Mr. Storms said, adding that the broker wants to understand how its clients and the overall industry feels about it, and that Marsh "absolutely" believes in transparency.

Gregory C. Case, president and CEO of Chicago-based Aon Corp., said until his company understands what the definition of "supplemental" is, it can't make a decision on whether to accept the method of broker payment offered by some insurers. But he stressed the need to make buyers aware of the value brokers provide, and the importance of talking about "value to price."

"It is absolutely incumbent on us to make you understand the value we provide," Mr. Case told the risk managers gathered at the conference.

With some brokers having rejected contingent commissions, others continuing to accept them and now some accepting supplemental commissions from insurers and others not, Mr. Case said the broker compensation system has gone from a one-tiered system to a two-tiered system now, and is potentially going to a three-tiered system. "And from our perspective, that doesn't make sense when you talk about value to price," he said.

J. Patrick Gallagher Jr., chairman, president and CEO of Itasca, Ill.-based Arthur J. Gallagher & Co., emphasized the benefit of "transparency" in the broker-client relationship, though Mr. Greenberg argued that "Transparency does not eliminate conflict."

"Who does the broker work for," Mr. Greenberg asked. "If it's an agent of the company, I have no problem with contingent forms of payment. If it's a broker, I don't think there should be (contingent commissions) unless it's between the broker and the client and the client is paying the contingent."

John Amore, CEO general insurance for Zurich Financial Services, said he thinks there is a need for flexibility and more than one type of compensation system "if you're going to deal across different customer segments and different size brokers and agents."

Regarding the debate over an optional federal charter for insurance in the United States, Martin J. Sullivan, president and CEO of New York-based American International Group Inc., noted that when his company goes to other markets around the world, it meets with a single regulator, unlike in the United States where it currently faces different regulators in each state.

"We need one regulator in the United States," Mr. Sullivan said, adding after a brief pause, "But I do love all my regulators."

Zurich's Mr. Amore said his company supports an optional federal charter, but for it to become law it needs the support of insurance consumers like those that make up RIMS membership.

Aon's Mr. Case suggested that the issue had something in common with the debate over a federal terrorism reinsurance backstop.

"This fits into the same bucket for me as TRIA," he said. "This will get politicized as an insurance issue as TRIA is politicized as an insurance issue. This is not an insurance issue. This is a client issue."

Asked about enterprise risk management, and whether it represents the next "silver bullet" in the insurance and risk management arena, Marsh's Mr. Storms said, "No, not a silver bullet, yes, a defining issue going forward."

But Mr. Case said that while ERM is much discussed, that discussion still needs to be translated into action.

"The conversations we're having are much more of a value-oriented, opportunity-oriented conversation," Mr. Case said. "But you've got to do it in a way that there's action."

Mr. Amore said he was struck by how many client conversations at this year's RIMS were on broader aspects of risk.

"We're thinking at Zurich this is where we can help our clients in a better way with insights into risk-based capital," he said.