Swiss Re Study Says It’s Back-to-Basics Time for Non-Life Insurers

October 31, 2001

The latest in Swiss Re’s authoritative sigma studies examines the profitability of the non-life insurance market in the G7* countries and concludes that the industry needs to concentrate on improving underwriting results by getting “back-to-basics.”

The study also focuses on the short and long term effects of the September 11 attacks, and attempts to put them in an historical perspective, although it admits that it’s not yet possible “to include a reliable and thorough analysis of these losses.”

Swiss Re’s announcement points out that “Insurers’ long-term profitability has been comparable to broad market indices. However, non-life insurers recently underperformed significantly. Worldwide non-life insurance markets are currently in a period of declining profitability, reflecting the trough of a soft underwriting cycle combined with a weakening investment performance.”

The study sees the need to improve underwriting performance “by at least 7 to 14 percentage points of net premiums, depending on the market,” and warns that increased claims costs and losses on equity investments make it imperative to do so.

The study can be downloaded from the company’s Web site at: http://www.swissre.com; or by e-mail from Silvia Hormacher in Zurich at: sigma@swissre.com; or from Richard Sbaschnig in New York: tel 1 212 317 5135; fax 1 212 317 5455

*The U.S., Canada, Germany, France, The U.K., Japan and Italy.

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