Insurance is a long term game, highlight by short term events (insured losses). Once the runoff is gone, or nearly complete, they company won’t need to justify each action to overbearing regulators. If the company can continue to increase revenue, control costs and losses, runoff the prior mistakes, we’ll all be fine especially in an increasing yield market from the treasury. Now that we are in the mid-teens again, I’m going to add to my very long position and smile at the divis each quarter.
The general increase in market returns, especially T-bills hitting 3% should also help assuming loss ratios do not increase. The yield is still so nice that the real return, at 20, is closer to 25% in one year. That would be a big hit in any year.