View from the Top - Hail the disciples of underwriting discipline.

(From Post Magazine)

Byline: Franaois-Xavier Boisseau, managing director, Groupama Insurances.

If the insurance industry tumbles into a sustained slump in the next few years we might trace the cause to activity in the months just ended. This year has seen a growing trend for some worrying price-cutting, triggered by a combination of amnesia and short-sighted short-term opportunism.

Sections of the industry seem to have forgotten the painful lessons we were all supposed to have learned a couple of years back - you can't run profitable businesses in the long term if you fail to charge appropriate rates.

Not that long ago, insurers were mired in crisis: underwriting losses were huge, with scant investment income to prop up the figures; it was nigh on impossible to push through even modest rate increases in most classes; capital was leaking rapidly away and underwriting discipline seemed in very short supply. We clawed our way back from the brink and swore we would never again allow rates to soften into mush. We pushed through higher premiums, tightened up expense ratios and gave a measured welcome to the gradual return of investment income but, lo and behold, as soon as the market shows signs of providing a profitable return, there are signs of people slipping back into bad habits.

There's a real danger we might start believing our own publicity: ...