IDEAS home Printed from https://ideas.repec.org/a/bla/jacrfn/v14y2002i4p94-99.html
   My bibliography  Save this article

The Insurance Performance Measure: Bringing Value To The Insurance Industry

Author

Listed:
  • Joseph Calandro
  • Scott Lane

Abstract

The performance of the property and casualty (P&C) insurance industry has suffered in recent years, even prior to the losses incurred in the tragic events of September 11th. Part of the industry's difficulties stems from its focus on premium generation, as measured by the combined or underwriting ratio, at the expense of overall operational performance. In this regard, the underwriting ratio is an incomplete measure of operating performance since it ignores two critical P&C operational functions: investment return and reinsurance results. In this article, the authors present their Insurance Performance Measure (IPM), a comprehensive performance measure for the P&C industry. The IPM captures the three critical operational functions mentioned above in an overall performance measure. The measure is also versatile in that it can be easily decomposed into critical value drivers in each area of operation. Thus, the IPM framework enables P&C managers to observe the interaction and trade‐offs between the operational functions of premium generation, investment return, and reinsurance results separately or as a group, and as they relate to the opportunity cost of surplus.

Suggested Citation

  • Joseph Calandro & Scott Lane, 2002. "The Insurance Performance Measure: Bringing Value To The Insurance Industry," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(4), pages 94-99, January.
    • Handle: RePEc:bla:jacrfn:v:14:y:2002:i:4:p:94-99
    DOI: 10.1111/j.1745-6622.2002.tb00452.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1745-6622.2002.tb00452.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1745-6622.2002.tb00452.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vladimir Njegomir & Boris Marović & Rado Maksimović, 2010. "The Economic Crisis And The Insurance Industry: The Evidence From The Ex-Yugoslavia Region," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 55(185), pages 129-162, April - J.
    2. Joseph Calandro, 2006. "Accident Year Development, Bonus Banks, and Insurance Incentive Compensation," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 9(2), pages 205-217, September.
    3. Danny Yeung, 2012. "The Impact of Institutional Ownership: A Study of the Australian Equity Market," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 2-2012.
    4. Adams, Mike & Baker, Paul L., 2021. "Does boardroom nationality affect the performance of UK insurers?," The British Accounting Review, Elsevier, vol. 53(5).
    5. Danny Yeung, 2012. "The Impact of Institutional Ownership: A Study of the Australian Equity Market," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 11, July-Dece.
    6. Bharathkumar, Sai Ranjani & Gupta, Santanu, 2020. "Simplex representation of insurance performance analysis," Journal of Policy Modeling, Elsevier, vol. 42(2), pages 419-436.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jacrfn:v:14:y:2002:i:4:p:94-99. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1078-1196 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.