Phabbyfundz
Active member
The property or casualty insurance industry has exhibited cyclical behavior for many years, as far back as the 1920s. These cycles are characterized by periods or rising rates leading to increased profitability. Following a period of solid but not spectacular rates of return, the industry entered a down phase where prices soften, supply of insurance became plentiful and, eventually, profitability diminishes or vanishes completely.
In the cycle's down phase, as a result deteriorate, the basic ability of insurance companies to underwrite new businesses or for some companies even to renew some existing policies can be impaired because they capital needed to support the underwriting of risks has been depleted through losses. Cycles varies in their severity.
Insurance cycle is not unlike the cycle that occurs in agriculture do example in the wheat and beef market.
In the cycle's down phase, as a result deteriorate, the basic ability of insurance companies to underwrite new businesses or for some companies even to renew some existing policies can be impaired because they capital needed to support the underwriting of risks has been depleted through losses. Cycles varies in their severity.
Insurance cycle is not unlike the cycle that occurs in agriculture do example in the wheat and beef market.