A prolonged period of historically low interest rates, coupled with claims inflation, is eroding insurers' profitability. For the majority of P&C insurers, return on equity is underwater; 51% of insurers in the Americas were trading below book value in 2021, according to the McKinsey report. (Credit: apghedia/Shutterstock) A prolonged period of historically low interest rates, coupled with claims inflation, is eroding insurers' profitability. For the majority of P&C insurers, return on equity is underwater; 51% of insurers in the Americas were trading below book value in 2021, according to the McKinsey report. (Credit: apghedia/Shutterstock)

The property & casualty insurance industry, by multiple measures, is in robust health. Market conditions are firm across most lines, capital and surplus remain strong, underwriting leverage is low and companies are generally showing strong earnings growth. But there is a problem.

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