It is unlikely there will be a repeat of the liability insurance crisis of 25 years ago because of better data collection, higher professional standards and more capital willing to enter the market quickly, many observers say.

But others warn against complacency and say that the right combination of catastrophes, economic factors and other issues could produce a comparable hard market in the future.

Steve McElhiney, president of Dallas-based intermediary EWI Inc., said the 1980s hard market “was something of an anomaly” that resulted from a confluence of events. “I think a hard market like this is maybe a once-in-a-generation event, and I don't think we'll see the magnitude of a hard market like "86, "87 again.”

Instead of sudden, large increases in insurance rates, “we're going to see more gradual increases and decreases, in the absence of a major catalyst,” he said.

Gary Langer, senior vp at Willis of New York Inc., a unit of Willis Group Holdings P.L.C., said insurers “are more sophisticated, I would hope, today, regarding reserving and pricing and trying to monitor tort issues, and I think actuaries play an active role in the underwriting process now.”

“We have sophisticated insurance buyers today,” but in the 1980s “there was a great deal more naiveté and lack of understanding of the policies that were being issued,” said Hugo Crawley, chairman of London-based BMS Group Ltd.

In addition, today's underwriters are more knowledgeable and the industry as a whole is better educated than 25 years ago, he said.

“Capital is smarter. There's a lot more technical analysis that's done, and people know there's money to be made when the cycle turns,” said James Vickers, London-based chairman of Willis Re International & Specialty. Some of extremes of a hard market “will be smoothed off” today because new capital will come in through sidecars and other means, he said.

John R. Berger, CEO of reinsurance at Bermuda-based Alterra Capital Holdings Ltd., said that today, “capital comes into our business in a second, which didn't happen in the "80s.” In addition, the analytical value that today's brokers and intermediaries provide, which is “really out of this world, was nonexistent back then.”

William M. Jewett, president of Pembroke, Bermuda-based Endurance Specialty Holdings Ltd., said, “capital is so much more fluid now, and there are so many different forms to take insurance risk.”

In the 1980s, insurance was “a much smaller industry, much less financially sophisticated, more predicated on relationships, more broker-driven, with probably less information, less technology, less-sophisticated management,” Mr. Jewett said.

William H. Eyre Jr., Philadelphia-based managing director of Towers Watson & Co.'s reinsurance brokerage business, said factors mitigating a return to a comparable hard market are a “much more stable reinsurance community” and much stricter insurer reserving policies, as well as closer regulatory oversight and the pressure on companies exerted by the Sarbanes-Oxley Act.

“I don't think we'll ever see the size correction” that happened back then, said Albert J. Beer, assistant professor at the School of Risk Management and Actuarial Science at St. John's University in New York, who then was a partner at Tillinghast. “I don't think we'll ever fall victim to the lunacy” of that time.

Underwriters are “more aware of potential latent problems and are actively looking for them in their underwriting reviews,” said John N. Gilbert Jr., chairman of reinsurance intermediary Holborn Corp. in New York. If such problems emerge, it will not “catch underwriters unaware to the same extent as was the case with environmental and asbestos claims.”

“People often say we don't learn from history, but I do believe we do learn something from history, and I don't see that occurring again,” said Carolyn Snow, director-risk management at Humana Inc. in Louisville, Ky. “Obviously, the market will tighten up again at some point in time,” but the ability to accumulate and use data that is available is improved today, she said.

Furthermore, said Ms. Snow, many who were young underwriters in the 1980s are now in senior management. Those who went through that hard market “learned something from it” and they “would work hard not to repeat that, and manage their firms and their organizations in a way so that it wouldn't hopefully happen again.”

However, “it's theoretically possible the same thing could happen again,” said Steven K. Bolland, president of New York-based reinsurance intermediary Gill & Roeser Inc. “Something could pop up in the courts and be this huge casualty loss issue that we're unaware of currently, and suddenly everybody's assumptions have gone out the window.”

Furthermore, if the capital markets come to see reinsurance as no longer “being an area of high potential (of return on their investment), then they'll move to other industries where they see the potential as being greater,” said Mr. Bolland.

Mark Charron, a principal and national actuarial and insurance solutions leader for Deloitte Consulting L.L.P. in Hartford, Conn., said, “we certainly are in a world of bigger insurance companies than we had back then.” If “you have a significant player in today's marketplace disappear, you could probably withstand it.” But if a handful were to disappear, “that might push into a situation where you had a severe market reaction.”