Which of the following is NOT a cause of insurer insolvency?

The rationale for identifying an effective long-term strategy as not being a cause of insurer insolvency stems from the fundamental purpose and impact of having such a strategy. An effective long-term strategy involves careful planning and execution across various facets of an insurance business, including risk management, investment decisions, and pricing strategies. When a company employs sound strategic planning and is adaptable to changing market conditions, it is better positioned to maintain financial health and stability over time.

On the other hand, underpricing, high interest rates, and poor investments can lead to significant financial challenges for insurers. Underpricing can lead to inadequate premiums being collected to cover claims, while high interest rates can impact investment income in ways that might harm reserves. Poor investments can lead to losses that erode a company's capital base. Therefore, an effective long-term strategy is actually a safeguard against the types of issues that can lead to insolvency.