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The property and casualty industry has not had a return on equity (ROE) better than the Fortune 500 since 1987. The last times it was even close were 1991 and 1993. Even if the Fortune 500 is not considered the right benchmark, the industry average ROE has declined from a high of 12.7 percent in 2006 to an estimated 3.9 percent in 2011.

Even more relevant, the industry ROE has been measurably lower than the average cost of capital since 2008. Running a business returning less than its cost of capital is rarely a sustainable model, as evidenced by the number of property & casualty impairments occurring since 2007.

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