Realizing Promise Of Strategic Sourcing

The property-casualty industry reported its first underwriting profit in decades in 2004. How did insurers get there?

The accompanying graphs provide some of the details, displaying loss ratios, loss adjustment expense ratios, expense ratios, and combined ratios since 1998 for nine major lines of insurance.

Net Loss Ratios: The first set of graphs shows six full years of net loss and loss adjustment expense ratios.

Net Combined Ratios: The second set of graphs shows six full years of net loss and loss expense ratios, underwriting expense ratios, and combined ratios.

Direct Loss Ratios and Premium Growth: The third set of graphsshowing data on a direct basisdisplays pure loss ratios (excluding loss adjustment expenses) and the percentage growth in premiums, for prior six years and for the nine-month periods of 2003 and 2004.

All graphs present calendar-year results. Therefore, a given year's results will include changes in loss reserves related to prior accident years (year's when losses were incurred).

Data for each full-year period is based on industry aggregate figures available in the U.S. Insurance product of National Underwriter Data Services. Data for nine-month periods were derived by summing results for over 3,000 individual insurance companies included in the data base.

National Underwriter Insurance Data Services (formerly Thomson Financial Insurance Solutions and Sheshunoff Information Services) is part of Highline Data LLC, the data affiliate of Highline Media, parent company of this magazine.

For information about NUIDS products, contact Chris Rogers at 617-441-5976.

Reproduced from National Underwriter Edition, March 25, 2005. Copyright 2005 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.