The insurance performance measure: assembling the property and casualty profitability puzzle

The property and casualty (P&C) insurance industry has historically focused on the underwriting or combined ratio as the primary measure of operating performance. Many dramatic changes have occurred in this industry and its operating environment over the past 30 years, which have reduced the importance of the underwriting ratio. An alternative performance measurement system, the insurance performance measure (IPM), is presented and illustrated. The IPM integrates all areas P&C operating activity into a measure more comprehensive that the underwriting ratio.