Credit Insurance after the Credit Crisis: The Future is Now

By Ron Doyle

Over two years ago, it was apparent that credit insurance companies were going to face problems as they abandoned their traditional underwriting guidelines in favour of more aggressive underwriting. Past credit insurance offers were priced so low that even a modest increase in claims would result in unacceptable loss ratios. This action alone deteriorated the pool of risk, and, like in the banking community, the credit insurance industry undervalued the cost of risk.

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