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18th of May 2012

Underwriters resort to traditional risk approach

Vicky Beckett 15/11/2011

Underwriters are looking to make a greater underwriting profit due to a lack of investment income after suffering from large scale natural catastrophes in 2011.
 
They have reportedly taken a more traditional approach to risk in 2011, which has increased costs for risk managers.
 
Michael Lubben, risk management vice-president for Ryder System,  said: “We recently went through our property renewal. We are seeing that underwriters are now going back to a more traditional underwriting stance, trying to make an underwriting profit.”
 
He believes this is especially because of the property market.
 
All the losses that insurers and reinsurers have suffered due to the frequency of catastrophes this year has caused insurers and reinsurers to make up for some of those losses.
 
He said: “I think investment income over the last two years has really been non-existent, although it’s picking up in 2011.
 
“As we look back over the last two to three years they’re not making up for underwriting lost on investment income so they’re forced to try and make it up by underwriting profit.”

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