Capital Punishment? The Challenge of Profitability and Growth in an Industry and World Awash in Capital

This PowerPoint report, presented by Robert Hartwig, president of the Insurance Information Institute, at the Geneva Association’s 10th Annual Insurance and Finance Seminar in London, analyzes how the combination of accumulation of capital on a global scale and low yields are impacting the insurance and reinsurance sectors. The presentation focuses on how the hunt for higher yields has pushed institutional investors into countless new areas, including reinsurance, and how this alternative capital is impacting the reinsurance pricing environment. It notes that capital has been accumulating on the balance sheets of nonlife insurers and reinsurers for years. The report also discusses profitability patterns, which today are more reminiscent of the pre-1970 era and whether this represents a quantum shift or is evidence of a supercycle. The presentation concludes with a review of capital allocation challenges.