I think the rationale for an investment in any general insurance...

I think the rationale for an investment in any general insurance company would be no different to any other investment, namely price compared to value.

Whilst it might be difficult to predict earnings year to year, that's all part of the game if/when investing in insurers.

And I would posit, that investing in these businesses makes most sense when the expectations for future returns are predicated on recent bad experience (perils, weather events and a whopper business interruption claim)

However, there can be optimal times to invest in a general insurer, such as:

1. Trading at a low valuation compared with 'through the cycle' earnings power
2. When one might have had a few years of adverse claims experience (and heavily provided for such claims in their balance sheet), and preferably a couple years of underwriting losses (as this quickly forces rational behaviour in an industry)
3. A tightening pricing market, as the competitive dynamics tend to be very very cyclical
4. Recent and prevailing poor returns on their float ($339m in 2019 vs $158m in 2021), often driven by low interest rates and elevated asset prices (sounds about right now)

The principal difference I see with insurance brokers, and they are typically great businesses, is that often you have to pay a high valuation for them predicated on their predictability and lack of volatility.

My principal concern with IAG at present is two-fold:

a. Are they just another big bumbling ASX bureaucracy where the Mgt have no true skin in the game. Hawkins seems to collect $3m pretty much risk-free, and taps the market for 10% of market cap if times ever get tough
b. Can they allocate the capital generated by their float sensible (albeit short-tail stuff in the IAG example), especially in an environment where the yield curve may steepen.