(Hartford, CT) June 24, 2004 – Property-casualty insurers’ cost of doing business has stagnated over the past 20 years, contrasting the remarkable efficiency gains achieved by many other industries. Since 1982, for example, the banking industry has reduced its efficiency ratio by 20% while the property-casualty industry has remained fairly flat, according to a study by Conning Research & Consulting, Inc.
The Conning Research study, “Expense Revolution: Is the Property-Casualty Industry Overdue?” found significant opportunities in each line of business for improvements in expenses and, by extension, overall financial performance.
“We identified these opportunities by using standard industry metrics and by creating nontraditional measures for expense performance,” said Bruce Hale, a Conning Research analyst and the report’s author. “This more detailed analysis clearly indicates a long-term opportunity to fundamentally change the industry’s performance. Expenses are the crucial controllable element in driving toward much higher returns on equity.”
“We know that insurers cannot sustain high-margin premiums, and claim inflation is largely beyond the industry’s control,” said Stephan Christiansen, Director of Research for Conning Research. “However, the stagnant expense situation detailed by this study indicates a huge opportunity for the industry. Insurers who are aggressive in accurately gauging their expenses and taking action will create a true, sustainable competitive advantage.”
“Expense Revolution: Is the Property-Casualty Industry Overdue?” is available for sale from Conning Research & Consulting, Inc., by calling (888) 707-1177 or by visiting the company’s Web site at www.conningresearch.com.
About Conning Research & Consulting, Inc.
The Conning name has represented excellence in independent insurance industry research for more than 90 years. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and can provide in-depth insights and analyses. Conning is headquartered in Hartford, CT, where it provides both public and proprietary research as well as consulting services to the financial services industry.