REPLY Dynamics of Insurance Insolvencies (SD6363)

[SDMAIL Bill Braun]

Posted by  Bill Braun <bbraun at hlthsys.com>

I don't have any SD resources per se - pay attention to the underwriting 
cycle. Broadly generalized, insurance companies lower premiums (below 
break even) to attract business and then raise them to protect the bottom 
line. Correspondingly, most revenue is generated by investments. If low 
premiums and a weak economy coincide, and the loss ratio is higher than 
predicted, and cash reserves won't cover the gap, trouble ensues.

Posted by  Bill Braun <bbraun at hlthsys.com>
posting date  Mon, 26 Mar 2007 06:44:31 -0400