Property and casualty (PC)insurance companies may use cash flow underwriting, in which they tend to lower their premium prices as interest rates rise.

Question

Property and casualty (PC)insurance companies may use cash flow underwriting, in which they tend to lower their premium prices as interest rates rise.  ​

Quizplus · Accepted Answer

Cash flow underwriting is a strategy where insurers may accept lower premiums (hence lower profit margins on underwriting) because they anticipate making up the difference through higher investment returns, which can be more likely when interest rates are higher.

Property and Casualty (PC)insurance Companies May Use Cash Flow Underwriting