Underwriters face two kinds of pressure, explains Donald Light, a senior analyst with Celent. One is the need to secure more business. The second is to make sure any business they write is profitable.
“Those often are contradictory pressures,” he says. “The easy way to get more business is to offer really cheap prices, but the best way to make sure your business is profitable is to maintain your pricing stance and not make concessions.”
Those pressure points are inflated by what Light calls “a prolonged recession or an anemic recovery, whichever phrase you prefer.”
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