UK insurers made underwriting profit four times since 1983
Thomas Hess, chief economist at Swiss Re, said prices had to rise to combat two years of non-life underwriting loss making and poor combined ratios, the FT reports.
“With very low interest rates, insurers must have combined ratios of 95% or less to ensure profitability, but for example in the US they are 105%,” he said. “There needs to be a hardening in the primary [insurance] market.”
Swiss Re data shows that insurers globally made an underwriting profit this decade only in the four years between 2004 and 2007.
Data from Bain & Co show that the UK insurance industry made an underwriting profit in only four years since 1983.
