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(From Post Magazine)
Commercial lines insurance has always been a cyclical business, with downturns producing massive losses that cannot be recovered when the market picks up. However, there have been few attempts to buck the trend, and success has depended more on luck than judgement. Now, a new approach is helping insurers manage the cycle systematically. By optimising their capacity and price strategies, players can increase their return on equity by more than 10 percentage points over the course of a cycle.
Recent years have witnessed a dramatic increase in cyclical price fluctuations for commercial lines insurance companies in virtually all of the ...