How has the insurance sector weathered recent storms?

INSURANCE UPDATE

The insurance business is in good shape but this is not fully reflected in stock prices, writes Alec Foster, manager of the Polar Capital Global Insurance fund.

The non-life insurance sector – better known within the industry as property casualty – has been subject to significant change since the early 1990s. There are many reasons for this, but two stand out. Firstly, Lloyds, which had been a self regulating market got into difficulties and was rescued in 1993 by Reconstruction and Renewal together with the creation of Equitas to contain latent long tail liabilities and in particular the toxicity of asbestosis. This led to the introduction of corporate capital at Lloyds with the necessary regulatory structures and disciplines that go with incor...