Too much money in the hands of the wrong carriers. Are you kidding, we haven’t even had a couple of years with combined ratio’s in the 110’s yet! This won’t get hard until the end of 2009 or into 2010.
“West Bend posted a 102 Combined in 2007, but that is the dirty little secret that they do not like to tell anyone. Also, construction is killing them in Illinois as they try to figure out what to do with all of that cheap Work Comp that they have written for very large agencies. They don’t want to explain the selling of their soul to their smaller agencies. Now storm losses are nailing them in Minnesota and Wisconsin. Not very good news ahead for WB, I’m afraid.” ??
How is the recession impacting written premiums? Everyone is talking about the soft market, but what are carriers seeing on GL and Work Comp audit? Lower payrolls, lower sales, and lower estimates on renewals? Lower stock values or reports? Or is this impacting only a fraction of the big picture?
Could be a difference of Trade basis vs. Financial Basis combined ratio. Combined ratios are often reported as Loss/Earned Premium + Expense/Written Premium.
UW Profit or Loss always is done based on Earned Premium. The difference between the two measurements could account for the anomaly you spotted if the total premium dollars taken in by the industry are increasing.
Second, how can any underwriter really expect to underwrite RISK from a desk & computer? Field Risk Assessments will never be replaced by a Computer & a few digital photographs. We see to frequently substandard construction & substandard materials being used in many properties today. These losses waiting to happen; are Risks are viewed & considered from a digital photograph, not by the eyes of an experienced Risk inspector. Every underwriter before take a deck should be required to spend considerable time in the field, seeing first hand various risks.
Commercial Fleets are also seldom inspected, with Million Dollars limits exposed; one would think a machine that could destroy $100,000’s of thousand in property damage and Million in Personal Injury would mandate an annual inspection and driver review.
To many Insurers have been taken over by; Financial Specialists and they have cut every reasonable Field Underwriting Tool, just reduced administrative expense by .10 cents. Leaving unqualified, inexperienced underwriters [in name only] with a, desk and computer to make Million Dollar decisions.
This same system is in place with Claims, where 90% are handled in house by phone, email and digital photographs. To save money? Most are paying Thousands for Hundred dollars claims and not one stands up to the bloody BI Ad’s on TV boasting how much money they have gotten their clients from the nasty old insurance company. These Ad’s over the years and diminished the Trust the public has in the Insurance Industry to the point where Used Car Salesmen rank higher.
The “financial specialists” have been running the show for the last 30+ years to the detriment of underwriting (regardless of what they say). There are a few underwriters and loss control people out there that are very good at what they do and if you have an imagination, you can, indeed, underwrite from digital photos and a computer. I still would rank a car salesperson lower than most people in the insurance industry.
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Let’s hope this report helps slow down the decreases
Too much money in the hands of the wrong carriers. Are you kidding, we haven’t even had a couple of years with combined ratio’s in the 110’s yet! This won’t get hard until the end of 2009 or into 2010.
This was posted under another article? Truth?
“West Bend posted a 102 Combined in 2007, but that is the dirty little secret that they do not like to tell anyone. Also, construction is killing them in Illinois as they try to figure out what to do with all of that cheap Work Comp that they have written for very large agencies. They don’t want to explain the selling of their soul to their smaller agencies. Now storm losses are nailing them in Minnesota and Wisconsin. Not very good news ahead for WB, I’m afraid.” ??
How can the P&C industry post a $0.6B UW loss yet have a combined less than 100 (99.9)?
How is the recession impacting written premiums? Everyone is talking about the soft market, but what are carriers seeing on GL and Work Comp audit? Lower payrolls, lower sales, and lower estimates on renewals? Lower stock values or reports? Or is this impacting only a fraction of the big picture?
Could be a difference of Trade basis vs. Financial Basis combined ratio. Combined ratios are often reported as Loss/Earned Premium + Expense/Written Premium.
UW Profit or Loss always is done based on Earned Premium. The difference between the two measurements could account for the anomaly you spotted if the total premium dollars taken in by the industry are increasing.
27 June 2008
First check the bonus to top executives!
Second, how can any underwriter really expect to underwrite RISK from a desk & computer? Field Risk Assessments will never be replaced by a Computer & a few digital photographs. We see to frequently substandard construction & substandard materials being used in many properties today. These losses waiting to happen; are Risks are viewed & considered from a digital photograph, not by the eyes of an experienced Risk inspector. Every underwriter before take a deck should be required to spend considerable time in the field, seeing first hand various risks.
Commercial Fleets are also seldom inspected, with Million Dollars limits exposed; one would think a machine that could destroy $100,000’s of thousand in property damage and Million in Personal Injury would mandate an annual inspection and driver review.
To many Insurers have been taken over by; Financial Specialists and they have cut every reasonable Field Underwriting Tool, just reduced administrative expense by .10 cents. Leaving unqualified, inexperienced underwriters [in name only] with a, desk and computer to make Million Dollar decisions.
This same system is in place with Claims, where 90% are handled in house by phone, email and digital photographs. To save money? Most are paying Thousands for Hundred dollars claims and not one stands up to the bloody BI Ad’s on TV boasting how much money they have gotten their clients from the nasty old insurance company. These Ad’s over the years and diminished the Trust the public has in the Insurance Industry to the point where Used Car Salesmen rank higher.
The “financial specialists” have been running the show for the last 30+ years to the detriment of underwriting (regardless of what they say). There are a few underwriters and loss control people out there that are very good at what they do and if you have an imagination, you can, indeed, underwrite from digital photos and a computer. I still would rank a car salesperson lower than most people in the insurance industry.