The two graphics below present the annual cash flow for the
last 8 years for the U.S. P & C industry. The first graphic sets out
the detail of cash flow from operations, investments and financing. The
second graphic sets out the net cash flow which has been negative for 4 of the
last 8 years and is clearly a deteriorating picture.
The detail presented
in the first graphic shows that the decrease in cash flow from investments in
2011 was largely offset by a somewhat improved cash flow from financing activities.
The result is that the overall negative cash flow suffered by the industry in
2011 came almost entirely from operations. This a key factor that is
moving the industry towards an ever tightening market.
- Jerry Sullivan
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