New insurance metric revolutionizes industry performance evaluation and profitability assessment.
The Insurance Performance Measure (IPM) was applied to Indian insurance companies from 2005 to 2016. IPM combines underwriting, investment, and reinsurance to assess industry and company performance. Unlike the Underwriting Ratio, IPM provides a balanced overview of profitability by considering all aspects of the business. It simplifies computations and can help in negotiating reinsurance renewals and determining maximum profitable capacity.