1988 Casualty Ratemaking Seminar

From the period between 1980 thru 1984, the insurance industry in the United States was in the midst of a period of extreme price competition. This competition, was fueled by unusually high interest rates which suggested that market share and cash flow would more than overcome any statutory price inadequacies. Unfortunately, the drive for market share and cash flow took on a life of itself, resulting in radical price discounts, which time has proven that even the originally anticipated high interest rates could not sustain. To make matters worse, interest rates fell dramatically which quickly spotlighted the folly of the market share/cash flow principle, at least for commercial lines of business.