Southern coastal residents know as much about the weather halfway across the globe as they do about the weather in their backyards. That’s because weather systems off the coast of Africa could eventually arrive on our shores in the form of a hurricane. Once the system evolves into a tropical storm, its most-likely storm track is predicted, with the extra feature known as the “cone of uncertainty.” And as the whole nation saw with Hurricane Gustav, everyone in the “cone” is advised to take measures to protect their property.
Due to economic conditions, most companies are now operating in a cone of uncertainty. Revenue growth and profitability are all in question. Inflationary forces of rising prices and declining productivity widen the cone of uncertainty even more. The credit crisis is putting some banks and lenders on the brink of insolvency. Insurance companies are also feeling effects of the sluggish economy. Pressure on property/casualty premiums are forcing companies to look at how they price risks. The declining returns on investments have squeezed the life insurance industry profitability just as products “guaranteeing” certain benefits are being introduced.
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