Insurers Recover From Whiplash

Last year, just about everything that could go wrong for insurers did. Hurricane Andrew and other catastrophes cost them $20 billion in claims and cut earnings of property-casualty companies by 37%, to $9 billion. Their available capital--from which claims are paid--fell 4.7%, to $150 billion, its first drop in nearly a decade. But the shock of that may produce a benefit in 1993. For now, it has ended the ruthless, often unprofitable price competition that has savaged the $223 billion property-casualty business for six years.

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