WE’VE BEEN SPOILED!
It’s interesting to reflect on how quickly expectations can change,
and how the exception becomes the standard!
We’ve finished another year with very good results, but must
confess to being a little disappointed that our 2007 combined ratio
was ONLY 96! It’s hard to imagine being “Ho-Hum” about
results that not too many years ago we could only dream about.
Over the last few years, we’ve been spoiled with combined ratios
in the 80’s, and the reality that those kinds of numbers can’t
continue indefinitely is just a little difficult to accept.
However, all the indicators suggest the “cycle” that has
always been present in historic results is still operational, and the
down trend in results will most likely be with us for a while.
Market conditions, economic factors, catastrophic weather events, regulatory
changes, etc. have all contributed to the current run of profitable
results. But the softening of the market that invariably follows a period
of positive underwriting results is certainly in full force, the economy
is curtailing any real growth in new business activity, the mortgage
and credit crunch contributes to a rise in ‘moral hazard’ loss
frequency, and the quiet period in major storm activity certainly will
not continue indefinitely.
But despite the negative outside influences, we can still mitigate
their impact if we continue to stress the basics of solid underwriting
discipline, rational pricing philosophy, and responsive service.
We are committed to these basic goals, and we will continue to pursue
them, AND will do so with Maine people in Maine!
Walter C. Smythe, CPCU, AAI, CIC
psmythe@patrons.com
President
