April 13th, 2009
Manage the Cycle, Part V: Protect Portfolio, Profitability
Posted at 12:30 AM ET
Gary Venter, Adjunct Professor, Statistics, Columbia University
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Profit pressure is the norm for the insurance industry. For short periods, market conditions may favor the risk-taker, but they are rare. Quickly, this mature, competitive industry returns to tighter margins and a battle for market share. Thus, managing to survive the leaner years until the market turns for a moment does not lead to long-term success. Carriers should optimize for tough markets … and be ready for the occasional favorable swing.
