Effective Claims Management The Other Road to ProfitabilityThe U.S. property-casualty insurance industry is enjoying its first return to profitability in more than a decade with double-digit premium growth and a combined ratio below 100 for the first time in five years. Most analysts credit this turnaround to solid pricing in a hardening market and improved fundamentals in each of the industrys main sectors: reinsurance, commercial lines and personal lines.
Underwriters are declining more business, imposing more stringent terms on the business they do write and charging adequate premiums for the exposures they are assuming. The combination of those three factors means more premiums and fewer losses, which in turn means lower loss ratios.
Whats more, the increase in premium without any significant increase in expenses means lower expense ratios. Lower expense ratios and lower loss ratios add up to lower combined ratios.
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