To examine whether the properties of the combined‐ratio series, an indicator of underwriting profitability in property‐liability insurance, have changed over time.
Using the autocorrelation function (ACF) and partial autocorrelation function (PACF), we check whether combined ratios are stationary.
Underwriting profit has worsened in recent years, and combined ratios are non‐stationary. This characteristic of combined ratios needs further analysis for its impact on underwriting cycles.
Traditional concepts of underwriting cycles, such as predictable cycle lengths and trends, may have changed.
The possibility of a non‐stationary combined‐ratio series is recognized, and the possible existence of non‐stationarity and breaks in combined ratios is introduced.
