Portfolio strategy for a regional insurer

A regional insurer held seven underwriting lines, three of which had been kept for reasons nobody could state in writing. Combined ratios ranged from 87% to 109% across the portfolio, capital was allocated by history rather than by return, and the executive team carried three unwritten strategies — growth, consolidation and harvest — depending on who was asked.

The board did not ask for a growth story. It asked the harder question: which of these businesses would we choose today, and what is that choice worth?

Eight weeks of unit economics settled the argument the portfolio had been having for a decade. Two lines were structurally unprofitable at any achievable scale — their combined ratio had exceeded 105% in seven of the last eight years, and the capital they consumed was priced at nearly twice its return elsewhere in the book. One line was sound but underpriced against its loss experience by a measurable margin. The remaining four earned their place.

Three genuinely different paths were priced — exit and redeploy, hold and harvest, sell the whole book — each with a written kill test. The executive team chose exit-and-redeploy in a single working session, on one page: exit two lines, reprice one against loss experience, and redeploy the freed capital into the two lines with verified pricing power.

The exits were sequenced as the first drawn phase — three commitments, each with a month-0 baseline. Markham took a position on every choice; the team decided. The page was signed, and every subsequent board paper traced to it.

Baselines fixed before the exits were announced; month-24 readings audited under MKM-F-003. No figure above is self-reported.