How to Measure Insurance Industry Performace

Despite being intimately involved with the practice of risk management, insurers have been ranked among the worst investments of 2008.

In a year when many investments may not have proved particularly sound, BusinessWeek notes that a number of insurers were among the absolute worst performers.

This saw them lose up to - and in some cases more than - 90 per cent of their share price, the article asserts.

Among the factors causing such a slump in valuations were government bailouts which left shareholders facing near-total wipe-outs of valuations in some instances.

The publication adds that the trend emerged in a period when many expected banks to falter as the credit crunch took hold of the financial services sector.

Meanwhile, automobile manufacturers also make the shortlist of bad investments.

BusinessWeek cites Lombard Street Research's finding that car purchases per head in the US are at their lowest since 1960.

As a result, the fortunes of a number of big-name manufacturers have followed to a corresponding low point.

Typical drops in stock valuations have been in the 80-90 per cent range both for full-vehicle manufacturers and operators in related industries.

Such industries include repair work and the supply of individual replacement parts.