Capital Punishment: Why Earning a Fair Rate of Return is Tougher than Ever in the P/C Insurance Business

The current hard market in property/casualty insurance is the result of many factors. The confluence of recession, pricing difficulties, soaring catastrophe losses, medical cost inflation, the crisis in corporate governance, low interest rates and the swoon in stock markets, abuse of the legal system and, of course, the threat of terrorism have combined to form the “Perfect Storm” that has made generating a reasonable rate of return in the insurance industry virtually impossible. This presentation discusses the difficulties insurers encounter associated producing adequate rates of return relative to the cost of capital. The focus of the presentation is on risk and return, but also includes an overview of the industry in light of the major challenges insurers face today.

The following presentation is called "Capital Punishment: Why Earning a Fair Rate of Return is Tougher than Ever in the P/C Insurance Business". It was presented by Dr. Robert P. Hartwig on September 16, 2002.

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