I am aware that capital strain and new business strain are the same thing. Is it called capital strain because shareholders may need to inject capital into the business when there is a new business strain?
Yes. The initial expenses and reserving requirements cannot be covered by the first premium. So the insurer must use its capital to cover the difference. Mark
though hopefully the shareholders won't have to "inject" capital too often. It will just put a strain on whatever is already there.
