After a record year for natural catastrophes, aÃ‚ tepid economic recovery and ongoing low interest rate environment, insurers are focusing firmly on underwriting discipline.
This was a key message communicated by insurer and reinsurer CEOs in a panel discussion at the 16th annual Property/Casualty Joint Industry Forum #JIF2012 earlier this week.
Industry CEOs representing small and large, public and private, agreed that with the still-challenging investment environment, underwriting discipline was more important than ever.
Lori Dickerson FouchÃƒ ©, president & CEO, FiremanÃ¢â‚¬â„¢s Fund, summed things up:
Ã¢â‚¬Å“Hope is not a strategy, as much as we would like it to be. It comes down to back to basics in terms of the business. We cannot rely on investment results. Underwriting discipline, operational effectiveness, and pricing Ã‚ Ã¢â‚¬“ these are the basics of running an insurance company that we have to strengthen to improve results.Ã¢â‚¬
A survey conducted by the Insurance Information Institute (I.I.I.) of P/C insurance industry leaders at the Forum revealed that most believe the worst of the financial crisis is over and that the industry is now in the early stages of a hard market.
Seventy-five percent expect an improvement in profitability in 2012; and in fact, 72 percent believe the industry is on the road to recovery.
The poll questions and full results are available here.