Duperrault is misleading readers when he says the AY combined ratio is the best measure of long term profit. Insurance carriers are in the business of insuring RISK, which necessarily includes the volatile results of cat perils, as well as the riskiness in reserves (which cannot be known until all claims are eventually paid).
The prior focus on growth by AIF, organic and by acquisitions, was due to staff levels that were being supported, and retention of stockholder loyalty. That approach ignored to their detriment the marketplace competition and consolidation of the reinsurance industry. The latter reason is less apparent as regards how it impacted AIG. The change in AIG management when Elliot Spitzer (i.e. Client #9) intervened is but one clue.
Underwriting income is premiums less claims? Wake me up to notify me the next time the FASB, SEC, or NAIC, etc. redefines the terms ‘profit’.
Duperrault is misleading readers when he says the AY combined ratio is the best measure of long term profit. Insurance carriers are in the business of insuring RISK, which necessarily includes the volatile results of cat perils, as well as the riskiness in reserves (which cannot be known until all claims are eventually paid).
The prior focus on growth by AIF, organic and by acquisitions, was due to staff levels that were being supported, and retention of stockholder loyalty. That approach ignored to their detriment the marketplace competition and consolidation of the reinsurance industry. The latter reason is less apparent as regards how it impacted AIG. The change in AIG management when Elliot Spitzer (i.e. Client #9) intervened is but one clue.