General insurance The insurance cycle exhibited by the insurance industry

[Phabbyfundz]

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.

 

[Wisdom01]

Obviously insurance is not only just a profit zone they also make loses ,so am not too suprise on why they entered a down phase , probably their reserved capital dropped , because they need more financial back up at first before they cover the risk attached ,since the risk can occur at anytime

 

[Mandy96]

Insurance is a lifestyle, once you purchase it, you will have to learn to live by it. Because the premium is what you will pay continuously while the other agreements will be required of you as the insured client. There are other things that are not usually exposed, you can only know about it when you are about to strike the contract Deal