Aspen CEO Emphasizes Underwriting Discipline

Speaking at a conference last month, Mario Vitale, co-chief executive officer of Aspen Insurance, emphasized the importance of underwriting discipline for the insurance industry.

With inadequate pricing levels for commercial lines, low interest rates and severe catastrophe losses, more insurers need to focus on underwriting discipline, said Vitale. He was the keynote speaker at a conference sponsored by research firm Advisen and the St. John’s University School of Risk Management in New York. “Given the current insurance market, insurance companies need to go back to the basics,” he said. “What do I mean by going back to the basics? I mean we need to focus on what we do best: strong technical underwriting; superior claims service and management; understand the risk; appropriately price risk; training and development.”

“Companies who do this, will emerge successful in this current environment,” he said at the conference. He said more and more insurers are seeing that they need to move away from the cash-flow underwriting model where they simply get the cash in and invest it. What’s important now is for insurers to make underwriting discipline their primary concern, he said.

A number of CEOs have been speaking out recently about commercial lines underwriting and prices. The Travelers Companies CEO Jay Fishman said at a financial conference last month that his company raised rates for business insurance customers by 5.2 percent in October, followed by a 5.8 percent hike in November.

Late last month, broker Marsh said rates were rising in the fourth quarter for most loss-affected geographies and classes of business. But in its report, Marsh added that capacity remains abundant and rates did not rise across the board.

Topics Underwriting