Why Some Insurance Companies Struggle Despite Growth?

Growth ≠ Profit in Insurance

– Aggressive growth often comes at the cost of quality
– High claims or lapses can wipe out topline gains
– Regulatory actions can restrict pricing freedom

Common Struggles Insurers Face

– High expense ratio despite growing premiums
– Poor underwriting leading to frequent claim spikes
Low persistency = revenue leakage

Real Examples of Growth Gone Wrong

– Rapid expansion with no margin growth
– Chasing market share in high-claim segments
– Delay in digital transformation

Red Flags to Watch

– Flat or declining embedded value
– Claim settlement ratio worsening YoY
– Over-reliance on one distribution channel

Investment Insights

– Prioritize profit growth over just top-line rise
– Track claim ratio, persistency, and combined ratio
– Avoid insurers with high churn and stagnant EV