Why the Property and Casualty Insurance Industry Needs a New Performance Measure

The property and casualty insurance industry has historically focused on the underwriting 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. These changes have dramatically decreased opportunities for underwriting profits, forcing the industry to rely more on its investment and reinsurance strategies. An alternative performance measurement system that incorporates these activities, the Insurance Performance Measure (IPM), is presented in this article.