News Analysis - IUMI Conference Update - Profitability is key.

(From Reinsurance)

Byline: Eric Alexander.

Last month's conference of the International Union of Marine Insurance (IUMI) in Seville focused on the issue of profitability revolving around the conference theme of "Our voyage to quality, safety and profitability".

IUMI president, Richard de Simone of the St Paul group of companies, told delegates that of the three elements that form the conference theme, profitability is the most important.

However, he continued: "If quality and safety are not present then profitability cannot be present. The results of the mid 1990s would suggest that marine underwriters almost neglected the issue of profitability, but now the managements of companies have become intolerant of businesses that lose money. The pressure on underwriters to produce underwriting profits is here but it is not good enough to get to profitability, underwriters have to remain as a profitable operation."

INCREASED PRESSURE

Mr de Simone said the need for the market to change was preordained based on the historically poor results turned in by the market in the mid to late 1990s. In addition, reduced investment income has increased the pressure on underwriters to return to basics and as a result the art of underwriting has returned with a vengeance and, along with it, the importance of underwriting profits.