One of the key measures of financial health in the insurance industry is cash flow. Whenever the industry goes into negative cash flow it is either in or is going into a tight market. Here are two graphics that present the annual cash flow for the U.S. Property & Casualty Insurance Industry for the last seven years.
The first graphic presents cash flow separately for Operations, Investments and Financing. Interesting to note that cash flow from Operations has been deteriorating over this time period and that Investments have not produced a positive cash during these seven years.
The second graphic presents the net cash flow position of the industry for the same period of time and note that the industry has had negative cash flow for three of the last four years. Will be most interesting to see what the cash flow position of the industry will be for the first six months of 2011 which will be presented here when available.