Guy Carpenter: Favorable Investment Returns Subsidize Poor Underwriting Results: An Illustration

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Uploaded by on May 6, 2010

Chris Klein, Guy Carpenter's Head of Business Intelligence, presents an illustration of the impact that higher investment returns can have on (re)insurer return on equity. A company with a six percent investment return is able to earn a 10 percent return on equity despite an unfavorable underwriting ratio. The situation is very different if the investment return drops by only 2 percentage points. Go to GC CapitalIdeas.com to see more materials on "Investment Gains:" http://www.gccapitalideas.com/tag/investment-gains/

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