Analysis of Return on Surplus Under Two Approaches For Including Investment Income in Ratemaking [Discussion]

Let me begin by dispelling any notions as to the unbiasedness of this review. Before obtaining Mr. Stewarts' paper, I had strong opinions on how an insurance company should function in a perfect free enterprise setting and the appropriate ways to measure its success. Under the guise of putting things in perspective, I will present some of these initial biases. In the review I will concentrate on the broader concepts and not try to verify the numerical results. It is important to note also, that my review is oriented toward "stock" insurance companies. Profit Factor, Rate of Return, Risk, Investment Income