Payback time.

Investors have been patient with the insurance industry over the past few years. They were assured that 2003 would be much better, only to be greeted with a string of rights issues, rating downgrades and reserve hikes. Now investors expect their tolerance to be rewarded in 2004. The insurance industry will have to prove that it can make a decent return or suffer the consequences. William Hawkins, insurance analyst at investment bank Kox-Pitt, Kelton says that investors really will be looking for quality earnings and quality returns on equity in 2004. The threat of further reserve hikes for insurance business is dampening in 2004.