simple exercise: take the investment income away from net profit (even before abnormals - any level you wish) and see the underwriting LOSS the portfolios generate on a year after year basis. Cant see a year after 2010 that's been profitable!!
no point polishing it. They sell risk at a LOSS and investment yields are nowhere near high enough to allow them to break even.
A strategy of selling off loss making portfolios will never end. Because thats what insurance is. Diversity was a blessing not a curse, you just had to manage the diversity. Oh no, too much work for this mngt. Finance rules 101: optimise the diversity of your portfolio for optimal returns, whats "QBE basics" doing instead? its concentrating the risk!
idiocy 101
those "profitable" portfolios are green today, but PROBABILITY and experience tells us they'll likely be RED tomorrow. Thats insurance. So do we sell them tomorrow? You'll be left with nothing under current mngt methodology.
And any portfolio that is consistently green is subject to price pressure through competition.
diversity should be the key, managing that diversity is what matters, they "basically" dont know how to do that.
btw - another yearly low hit. where's the next stop?
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