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Is Your Captive a Value Creator? by John Salisbury, President A recent study by IBM Global Insurance Industry has concluded that only niche, specialty commercial-lines insurers were identified as sustainable value creators. Sustainable value creators are companies that generate cumulative cash flows from both underwriting and investments that exceed the cost of capital.
The study examined 75 largest U.S. property/casualty insurers as measured by net written premiums. The carriers represented 75% of the property/casualty industry premium and spanning the period 1987-2001. Read the March 2003 Best’s Review to learn more about the study.
Some captives have been looking for ways to benchmark their performance. Use of this technique may be a good benchmark for financial performance.
Those insurers who do not meet the value creator
or sustainable-value creator benchmark are classified as hollow-value
creators and value destroyers.
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| http://www.captive.com/newsstand/CaptiveShorts/Value.html | |
