The focus on profitable underwriting business comes as Citigroup is spinning Travelers into an independent business unit. The bank conducted an initial public offering, worth 20% of Travelers, at the end of March and plans to place the remaining equity in the capital markets by the end of the year.
Belden said the insurance market was moving towards a hard market environment prior to September 11, but the attacks on the World Trade Center have now accelerated underwriting discipline. “Almost overnight the underwriter became king again,” Belden told Risknews. “There has been a definite change in the industry. Underwriters had felt that their core skill base was being hugely undervalued for the last decade compared with sales, marketing and other insurance business activities.”