Casualty Actuarial Society (CAS) Practice Exam

One of the five major goals typically set by an insurer is to earn a profit. Insurers operate in a business environment where profitability is essential for sustainability and growth. Earning a profit allows insurers to pay claims, invest in business operations, and provide returns to shareholders. Insurers achieve this goal by effectively managing their underwriting processes, investment strategies, and operational efficiencies. The profit generated also supports the insurer's ability to remain competitive in the market.

While ensuring customer satisfaction, diversifying investments, and maximizing market share are also important goals for insurers, earning a profit is fundamental as it affects the ability to pursue these other objectives. A company that does not maintain profitability will struggle to satisfy customers in the long term or invest in ways to diversify and grow its market presence. Thus, the emphasis on earning a profit is crucial in the context of an insurance company’s operation and strategic planning.