The Great Tradeoff: Regulation, Strength and Solvency vs. Profitability and Growth: Can They Co-Exist?

This PowerPoint report, presented by Robert Hartwig, president of the Insurance Information Institute, at St. John’s University School of Risk Management, Insurance & Actuarial Science, looks at profitability and growth in the property/casualty (P/C) insurance industry in relation to regulation, financial strength and solvency. The presentation is divided into two sections: profitability and growth. The first section discusses what lessons the P/C insurance industry can learn from history, with a focus on insurance cycles. It also poses the question of whether financial strength and robust profitability can co-exist, analyzing the roles of seven “fall guys” (mother nature, Wall Street, the Federal Reserve, the economy, the President, ratings agencies and regulators) when profits suffer. The section concludes with a discussion of whether the insurance industry is becoming less risky, comparing it with the banking industry. The second section provides a global history and overview of growth and discusses whether financial strength has come at the expense of growth. It analyses why so much loss is uninsured globally and how to close the gap. A sidebar focuses on advertising in the P/C insurance sector.