Insight and Intelligence on the London & International Insurance Markets 19 Feb 2018

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Efficiency drives and improved leverage help Q4 expense ratios

  • Iulia Ciutina and Gavin Davis 6 February 2018
  • Fourth quarter expense ratios at early reporters have shown some year-on-year improvement, although the US tax reforms had a negative impact at some firms.

    The improvement was broadly driven by ongoing efficiency measures and improved operating leverage, however it is worth noting the fourth quarter can also be a "noisy" period for expense ratios due to the impact of performance-based compensation adjustments based on full-year results.

    On average the expense ratio among early reporters decreased from 32 percent to 31.2...

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