Originally Posted by
Antipodean
Past performance is no guarantee of future results... cuts both ways.
If your analysis indicates this is the same company of 2016, 2011, 2001, then yes I would avoid.
If you look at the transformation program of this company in the last several years and believe this will come with future benefits, there is a case there for a current investor.
It is still somewhat risky as not all advised transformations succeed, and an investor should price and note risk accordingly.
Early fundamental signs for me are positive, but there is still long time to regain market trust.
In relation to climate change, yes an increase in expected EWE's is there. Good insurance companies historically adapt to whatever the changing paradigm is with a mix of direct per policy actions (targeted excesses, premium loadings), book actions (premium rating, underwriting) and company actions (reinsurance treaties). Those companies that do the large numbers remain profitable in changing circumstances over the long run. It shouldn't matter what the change is, even if 1 in 50 year events become 1 in 5 year events, the law of large numbers and a proactive response can handle this.
Overseas companies have performed this trick to remain profitable in shifting times. Will Tower follow? Time will tell.