Insurers Earnings Less Volatile
A review of more than 60 major property-casualty insurers and reinsurers has revealed that last year?s corporate earnings in this sector were, on average, less volatile compared to 2002, while at the same time the return-on-equity improved substantially, according to a new study.
The findings were announced by the Chicago-based insurance brokerage firm Aon Corp. in a report titled "2003 Property and Casualty Earnings Volatility Study."
Earnings stabilization, the report said, was made possible by solid underwriting results stemming from prior rate hikes and only marginally higher catastrophe losses.
The Aon report included the volatility ranking for the companies it reviewed, separated into different business lines.
o In commercial lines, the winner, with the least volatile earnings on a year-over-year basis, was the Bermuda-based ACE Limited, with American International Group Inc. in New York coming in second.
In personal lines, Mercury General Corp. in Los Angeles had the least volatile earnings last year, with the Nashville-based Direct General Corporation coming in second.
In specialty lines, RLI Corp., Peoria, Ill., was least volatile, with United Fire & Casualty Company in Cedar Rapids, Iowa, coming in as the runner-up.
In reinsurance, Montpelier Re Holdings Ltd. of Bermuda had the least volatile earnings, followed by the Barbados-based Everest Re Group Ltd.
"Once a year we want to recognize the companies that led their respective sectors in generating the least volatile earnings," said Michael Bungert, president of Aon Re Global. Aon has been providing the volatility data in the sector for the past several years, Mr. Bungert added.
Reproduced from National Underwriter Edition, June 25, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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