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New CSTPR Publication by Jessica Weinkle:
An Average Perspective on Insurance Profitability Cycles
Insurance Journal
October 6, 2014
by Jessica Weinkle
Dr. Robert Hartwig, president of the Insurance Information Institute (III), is well known for his plentiful data on the insurance industry and chartist presentation style. His identification and aggregation of data is quite commendable.
On several occasions, I have come across Dr. Hartwig’s chart on Property/Casualty Insurance Profitability (See above). The image shows annual first quarter return-on-equity (ROE) for the property/casualty industry from 1975 onward. Arrows overlaying the data demarcate an approximate 10-year period between points of peak profitability.
I don’t find the suggested decadal cycle of P/C industry profitability all that convincing. However, I do think the data is interesting.
I’ve extracted the data from Dr. Hartwig’s “P/C Insurance Profitability” chart above and created the two charts below. The first chart shows the five-year moving average of the data. Read more …
