One commercial insurance firm has been making moves in the right direction, according to industry experts.
Business insurance experts Chartis have taken positive steps by restructuring its business through a series of recent shakeups. The insurer has had its asbestos liabilities taken off its hands by a Berkshire Hathaway firm, has for the most part removed itself from workers’ compensation business, has trimmed back on property lines that have been exposed to natural catastrophes, and has reduced its exposure to the excess-casualty market, which has been noted as being excessively volatile as of late.
Industry experts have also viewed the insurer’s massive reorganisation plan and its new leadership have also been seen as positive changes. However, industry analysts say that there is still much work to be done, as the profitability of Chartis has been lagging behind its competitors, and will have to work quite hard to close the gap in order to start turning an underwriting profit once again.
The second quarter combined ratio for Chartis this year was 104.0 per cent, which compared unfavorably to 2010’s Q2 102.0 per cent ratio. The insurer is predicted to post between a 103 and 104 per cent combined ratio for the entire year, according to Standard & Poor’s, though including potential reserve developments and leaving off catastrophes alters this figure to a more palatable 97 to 98 per cent.
Chartis member companies have been losing business since its near failure of AIG, its parent company, in 2008. The damage AIG’s reputation suffered has been a hurdle that Chartis has been hard-pressed to overcome over the past two years, according to a report from AM Best.