The U.S. Property & Casualty insurance industry is the largest in the world, representing over 35% of total global premiums. Not surprisingly, as the largest, it’s also very complex, with a large number of firms, different ownership structures, unique products, and multiple regulators. Given the complexity of the market, measuring value creation – much less understanding its drivers and implications – is extremely difficult. The ACORD U.S. P&C Value Creation Study was conducted to get at the essence of sustainable value creation and the characteristics of those who achieved it.
The latest edition of the study, released in December 2022, found that more than half of value-creating insurers did so through investment income alone, depending on this revenue to offset underwriting losses. ACORD focused on Sustainable Value Creators – those who generated excess cash flow through both underwriting and investment – in order to uncover the strategies, tactics, and capabilities that lead to success.
“Increased alignment between strategic intent and
capabilities is the key differentiating factor separating sustainable
value creators from destroyers," said Bill Pieroni, President and CEO, ACORD. "We are finally seeing the true impact of
decades of technology investment on results.”