Let\’s see if I\’m reading this correctly:
1. Allstate had no reinsurance in place for Katrina.
2. They posted a third-quarter loss of $1.55 billion.
3. Now they want to set up a National Reinsurance Disaster Plan.
Then everyone will be in \”good hands\”.
Allstate is a sad story for an American company. This company was never managed properly, it has basically flipped off everyone is society. Their management is a sad story, people at the top of Allstate wouldn\’t even make it to mid-management in another company. This company has no future nor do they have any direction.
A big surprise – Allstate carries little or no reinsurance. In NY they can\’t factor their CAT models into their rates, and they have no reinsurance costs to add in. Their rates end up being artificially low compared to companies that protect themselves. Now it\’s coming around to bite them. So of course they would be quite happy if gov\’t stepped in and reinsured them.
So how would reinsurance companies be affected if this proposal passes? Will the $600 mil. paid by Allstate to reinsurance companies for instance now be paid into the fund? I.e. is the fund meant to replace reinsurance altogether or do reinsurance companies still have a place in the equation somehow, depending on each primary insurer\’s predetermined reinsurance strategies?
There\’s no good way to handle regional events like earthquakes, hurricanes or flooding in the Mississippi River and its tributaries, but we all end up paying for it (thanks to the Congress and the presidents who sign the legislation bailing-out folks who built in hazardous areas and without the right insurance coverage).
A National Disaster Fund could be factored into P&C rates as a predictable catastrophe loading (basically, a tax funding transfer payments to disaster victims) but it would be VERY difficult to keep a pot of money dedicated to disaster relief safe from the predations of pork-barrelling politicians (remember the NY legislature spending the dedicated funds assessed against insurers, and coming back for another bite of the apple because the law says insurers had to keep the fund at a certain dollar level?).
I liked the proposal that would allow insurers to pre-fund their own tax-free disaster accounts. If private industry can maintain control of the funds, there\’s some hope the money won\’t all be spent buying votes for the next election!
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Let\’s see if I\’m reading this correctly:
1. Allstate had no reinsurance in place for Katrina.
2. They posted a third-quarter loss of $1.55 billion.
3. Now they want to set up a National Reinsurance Disaster Plan.
Then everyone will be in \”good hands\”.
The article says the fund will cover volcanic eruptions? Are there volcanoes in FL???
This is a story I don\’t think will show up on Allstate\’s employees\’ intranet home page anytime soon.
Allstate is a sad story for an American company. This company was never managed properly, it has basically flipped off everyone is society. Their management is a sad story, people at the top of Allstate wouldn\’t even make it to mid-management in another company. This company has no future nor do they have any direction.
A big surprise – Allstate carries little or no reinsurance. In NY they can\’t factor their CAT models into their rates, and they have no reinsurance costs to add in. Their rates end up being artificially low compared to companies that protect themselves. Now it\’s coming around to bite them. So of course they would be quite happy if gov\’t stepped in and reinsured them.
So how would reinsurance companies be affected if this proposal passes? Will the $600 mil. paid by Allstate to reinsurance companies for instance now be paid into the fund? I.e. is the fund meant to replace reinsurance altogether or do reinsurance companies still have a place in the equation somehow, depending on each primary insurer\’s predetermined reinsurance strategies?
There\’s no good way to handle regional events like earthquakes, hurricanes or flooding in the Mississippi River and its tributaries, but we all end up paying for it (thanks to the Congress and the presidents who sign the legislation bailing-out folks who built in hazardous areas and without the right insurance coverage).
A National Disaster Fund could be factored into P&C rates as a predictable catastrophe loading (basically, a tax funding transfer payments to disaster victims) but it would be VERY difficult to keep a pot of money dedicated to disaster relief safe from the predations of pork-barrelling politicians (remember the NY legislature spending the dedicated funds assessed against insurers, and coming back for another bite of the apple because the law says insurers had to keep the fund at a certain dollar level?).
I liked the proposal that would allow insurers to pre-fund their own tax-free disaster accounts. If private industry can maintain control of the funds, there\’s some hope the money won\’t all be spent buying votes for the next election!