This report makes the assumption that the battle for rate adequacy will be won in a foreseeable future. And when that happens:

• In the short run, declining losses will lead to stronger underwriting results.
• Over time, however, regulatory and competitive pressure responding to lower losses will lead to lower premiums.
• Then what should insurers, facing an extended period of lower premiums, do to achieve longer-term success?

The report identifies four areas in which expenses may be reduced:

1. Underwriting and underwriting portfolio management
2. Policyholder service
3. Internal claims staff
4. Information technology (IT)

The report concludes that:

• A transition to more variable costs will require organizational agility.
• In the transition, maintaining existing areas of competence will be fairly straightforward, while maintaining competitive edges built over years may be more of a challenge.
• Reducing staff may be straightforward, but maintaining long-standing relationships could be more of a challenge.