The cost of using investor capital by property-casualty insurershas dropped from 15 percent in the 1980s to between 7- and 8percent, according an analysis by Swiss Re.
The Zurich-based company said in its latest sigma study that thedecline in costs was due to significantly lower risk-free interestrates, equity risk premium and percentage of equity investedassets.
Veronica Scotti, who wrote the study, said that the analysisalso concluded that insurers who want to keep their share prices upshould focus on good underwriting results and premium volume asopposed to investment gains.
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