A panel of CEOs at a recent industry forum looked back and shared their thoughts on 2011, the year of record-high catastrophe loss for many carriers.
Ohio Mutual Insurance Group CEO James Kennedy said that small- and mid-size mutual insurance companies were hard hit by CAT losses. “Never in my 40 years have I heard of combined ratios being reported as high as they are,” Kennedy said at the Insurance Information Institute’s Property/Casualty Insurance Joint Industry Forum, held last week in New York.
‘A Lot to Be Proud of’
A number of CEOs said they were proud of the way the insurance industry handled the catastrophes and took care of the policyholders.
“We have a lot to be proud of as an industry in the way we performed in 2011,” said Lori Dickerson Fouché, CEO of Fireman’s Fund. “We weathered the financial storm that came together both in terms of the economy and the extraordinary loss year.”
Shivan Subramaniam, CEO at FM Global, agreed. “Given all the things that have happened in the business in the last 12 months, we have done very well for our policyholders in some very bad times. Despite the more than 21 natural catastrophes worldwide, we took care of the needs of policyholders and continue to be very solvent and continue to have strong balance sheets.”
The P/C insurance industry posted the worst underwriting results since 2001 last year, and the ROE was in the low single digits, according to the Insurance Information Institute.
David Long, CEO of Liberty Mutual Group, said it was “the year of non-model cats” which exposed some of the strengths in the industry as well as some of the things the industry needs to work on.
“It hit the fact that a number of lines of business are fundamentally underpriced. So results wouldn’t have been what you would have hoped anyway and that was masked by those non-model cats,” Long told the conference audience.
Ohio Mutual CEO Kennedy added that the severe weather damage also showed the value of insurance, especially for those who never had to file claims before.