Broken Records and Better Underwriting

Posted at Sep 22, 2016 7:00:00 AM by Ivan P. Maddox


As the analysis of insurer’s first half results come in, there are a few consistent refrains. In fact, they sound like broken records.

The first is that cat losses were up in the first half. No surprise here, as hail and flooding in the US has been severe so far this year, and these losses have been making headlines since May.

The second is that investment returns are low. Sound familiar? Expect it change soon? Thought so…

The third is that the importance of underwriting profitability continues to increase. In a system where cat losses are growing and investment returns are shrinking, underwriting is the key to success. Here is an IJ piece based on Fitch’s look, and here is another look, and another, and another, and another.

Underwriters should not be intimidated or scared by these headlines – it’s all part-and-parcel of insurance. However, underwriters should be looking for ways to take advantage of the conditions, because opportunity continues to grow – particularly in the protection gap and private flood. But if, with all the doom and gloom, you do need a bit of mirth, here is a post from last autumn that might still be worth a look.

Topics: Insurance Protection Gap, Insurance Underwriting, Private Flood

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