Price Hikes Needed In Homeowners Market

A glance at the graph on page 1 should convince most readers that there is a serious problem of profitability in homeowners insurance.

In the graph you see a breakeven combined ratio of 103. This breakeven concept is borrowed from A.M. Best–it is the value of the ratio where the industry would break even, including the impact of investment returns. As the graph shows, the line has shown a profit in only one year (1997) during the 1990s.

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