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Balancing capital with risks

Article Abstract:

Regulators may not be able to prevent all insurers from becoming insolvent through risk-based capital requirements, but they may be able to intervene before insurers lose all of their financial resources. The National Assn of Insurance Commissioners (NAIC) has formed a property and casualty risk-based capital working group to develop a model law for insurers and a formula for risk-based capital. The NAIC plans to create a formula that relates capital and surplus requirements to operating risks, develop a standard for capital and allow regulators to enforce compliance.

Professional organizations, Standards, Capital, National Association of Insurance Commissioners

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Claims management as a top priority

Article Abstract:

A report by Tillinghast and Towers Perrin Insurance General Management Consulting analyzed operating expenses of 15 property and casualty insurance companies. The study determined that the companies have increased claims-related expenses in 1991 and that this may be a sign that insurers believe claims management should be a top priority. The study also revealed a 5% loss in distribution expense ratios from 1990 to 1991. Additionally, insurers have increased underwriting policies geared to individuals and decreased products geared to the commercial sector.

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1991 industry bond holdings

Article Abstract:

An analysis of the bond holdings of the property and casualty insurance industry in 1991 is presented. Total bond holdings, which represented 60% of the industry's investments, were $393 billion. Bond holdings were diversified among such investments as government-backed securities, municipal bonds and mortgage-backed debt. Municipal bond holdings, which remain the industry's most popular investment, declined from 64% of the total bond portfolio in 1981 to 46% in 1991. Other trends associated with the industry's bond investments are discussed.

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