Insurers Trim Expenses, But Not Commissions

Budgets tightened mostly in home offices & branches; producer payments track premiums

Its expensive to underwrite property-casualty insurance, with 25 cents of every dollar going toward underwriting expenses. And it hasnt gotten a whole lot cheaper in recent years despite discussions of cost-cutting efforts by individual insurers.

Still, the overall net underwriting expense ratio for the property-casualty industry did drop roughly 2.6 points over the past seven years, from a level of 27.6 back in 1998. In 2003 and for the first nine months of 2004, the average industry statutory expense ratio on a net-of-reinsurance basis held at about 25.0.

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