Insurance Networking News recently interviewed Marcus Ryu, vice president of consulting services, at Guidewire Software Inc., a San Mateo, Calif.-based firm that provides software to the P&C and workers' compensation industries. Ryu plays a central role in developing and implementing leading solutions for the insurance industry.INN: In the white paper titled, "Achieving Underwriting Excellence with Guidewire PolicyCenter," you cite a study by McKinsey & Co. What did that study reveal?
RYU: Using publicly available data, the study evaluated underwriting performance (measured by loss ratio), investment margins and correlation of return on equity (ROE) over a 15-year period with three different premium surpluses. It found that underwriting performance was very highly correlated with ROE, while investment margins and surplus were negligibly related. The study also found that underwriting best practices translated into long-term corporate success: Of those carriers in the bottom two quintiles of underwriting performance in the 1980s and early 1990s, three out of four had been acquired or went out of business by 2005, while virtually all top quintile carriers during that period remained industry leaders.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access