When individuals, that are not satisfied with more than enough being enough, eventually meet up with those that have had enough of their profiteering antics, negative and positive market changes happen.
Contrary to their public claims, Allstate should stop putting profits before people, because people will eventually see that all of their feel good commercials and smiling agents are just another form of ‘opium’ for the masses.
Smuggly challenging the law and the general public good…what arrogance.
Certain Mafia type bullies-individuals have tried to control the public and government in the recent past…and failed.
Liddy may want to research, and reflect on, why they failed.
I recognize that in Florida, insurer’s are facing difficult decisions. After last years unprecedented losses, the market is hardening (especially from the reinsurance side) and the “heralds of hurricanes” tell us this is just the beginning of an upswing of the frequency and severity of storms.
If Allstate feels that it needs 28% more to insure their exposure and decides to use and file, then so be it. If it countermands an order by the Department, then they can levy a fine. The fact is that there are more companies coming into the market every day. Companies taking policies out of Citizens as start ups, companies like Universal who are willing to offer renewals to the Allstate Floridian policyholders who are being non-renewed, as well as existing insurers who I’m sure would welcome the opportunity to pick up some business to balance their exposure and PML.
The fact is that the market will level itself out. I hear where Mr. Gallagher is coming from… he doesn’t want Allstate to set precedent that others will follow. But he and Commissioner McCarty have the means to make it very uncomfortable for those carriers who take this route. I would urge them to do exactly that. After Andrew, there was a moratorium on non-renewing of business, limiting the percentage of total policies to be non-renewed and the geographic spread of those “undesireable” risks. While this produced a lot of wailing and gnashing of teeth amongst the insurers, they found a way to get by.
Again, the market will level itself. Let’s not get anxious over one nsurer’s ‘greed’, if that is in fact what it is. Allstate has never been the cheapest of products and there are more than enough admitted companies like Vanguard, First Protective, Coral, the newly founded Gulfstream and others that will happily come in with ISO paper, a solid Demotech rating and the surplus to carry the exposure and will take the biggest pieces of the pie. The crumbs that are left over will end up in Citizens, which is probably where they belong.
I am assuming that “been around” has not had to face a 200% increase in HO insurance recently… $2400 per year for HO insurance on a $200,000 home is pretty rediculous… most of us cannot afford this, personally there goes my half my grocery money every month.. the american dream, owning your own home… well not any more… cheaper to rent and pay renters insurance… something has to be done at the state level to stop these insurance companies from charging these rates… they are no different from the MOB!
Actually, I have been facing just the same increases as you have. I perosnally am paying over $4000 a year. So trust me, I understand where you are coming from and I feel the pain as well.
What I’m pointing out is that if you shop around (assuming you aren’t living directly on the water, or in northern Pinellas or Pasco County), you should be able to find a better rate for the same coverage. It’s like car insurance. Someone out there will always give you a better rate (as long as you don’t have significant claims against your current homeowners carrier).
I know that sometimes it feels like the insurance company is just jacking up rates to make more profit, but trust me when I say that is not the case. The costs for reinsurance is skyrocketing, interest rates are still low and the margin for profit is extremely slim. Add on top of that last year’s storms (which for some of the smaller carriers, wiped out all of the profits they have acquired since Andrew in ’99)and it is a tough time for those of us who are “in the business”, as well as the consumers in the state.
The price of a product needs to be at least what the provider expects the costs to be. If the price of beef is going up your cheeseburger needs to cover the cost of your next beef purchase. Your cheeseburgers may be a little high-priced this week, but next week when your competition can only buy the buns, you will still be able to offer the whole burger.
If the provider has miscalculated the costs and keeps his price too high he will suffer the loss of market and his competition will capture that market.
Insurance regulators need to monitor for solvency. It is their first responsibility. After Hurricane Andrew it was very apparent the regulators hadn’t been monitoring for solvency. They just gathered for the company closings like Elvis impersonators at shopping center grand openings.
Let competition worry about lowering the rates. Make sure the regulators see that the rates are adequate for solvency.
I find this whole approach used by Allstate offensive. I think that every company that opperates in the state of Florida should have to operate at the rate structure mandated by Tom Gallagher.
Tom obviously is smarter and much more knowledgeable than those criminal insurance company actuaries. I also am sure that people investing in stock in these companies will have no problem is losing money for the priveledge of operting in FL.
I am also fairly certain that policyholders in other states will have no problem in subsidizing Florida Policyholders. After all we can’t expect people who live in million dollar homes in coastal wind zone areas to pay more than someone in a brick house in Des Moine Iowa. That would be grossly unfair to the Florida policyholder.
I am pretty sure that Tom Gallager has all of the Floridians interest at heart when he publishes his mandates and edicts.
The rest of the country just does not understand how difficult it is to rule, er I mean, oversee the indusurance industry. It is a good thing that we have altruistic and benevolent people such as Tom keeping an eye out for Floridians everywhere.
I would have thought that most readers of the Insurance Journal would be a little more savy about the economics of insurance.
Insurance companies are in the business of making money (which is not a bad thing because that’s what most people are trying to do). Are they making too much money? If you think they are, then here’s your chance to cash in. Invest in an insurance company. Better yet, start up your own insurance company and provide a homeowners market in Florida that everyone can afford. Believe me, if you build it…they will come! Oh wait, you say that you did come checking and that, over time, insurance companies have lower rates of return than most other industries. If they’re making so much money as you say, why aren’t their returns better than many other industries. Oh, I remember now. Hurricanes! When the big one (or four smaller ones) come along every ten years or so and wipe out all ten years of Florida profits, it’s hard to have a good return on equity.
I live in Florida (and I to pay the high rates) and I also work for a property and casualty insurer. Believe me when I say that it’s not that easy to make a profit here. If we want multiple players in the Florida market with products priced right, it may not be at a price we would like, but rather at a price that’s needed.
“legalized extortion” needs to understand basic business strategy. Insurance companies are in the business of making money, and providing a return for their stockholders. Under pricing coverage or accepting risks without consideration of the risk they are taking is not good business sense.
It sounds like you made a decision to live in an area prone to hurricane damage; pay the costs associated with living in a hurricane prone area or move. My wife and I recently bought a house that backs to brush in Southern California, and we had to search long and hard for a carrier that would write homeowners coverage for us. Most carriers did not want to write us due to our proximity to brush. As you can imagine, our costs went up dramatically. We understood what we were getting into, and we were prepared to pay more to live next to the brush.
We all make decisions on where we CHOOSE to live. There are costs associated with those decisions. Insurance is not an entitlement. Insurance companies are in the business of making money; with the combination of the entitlement attitude of much of the public, legislation that reduces their ability to truly underwrite (credit scoring, past claims, etc…) it is a wonder that we have the healthy competition that we do have in this industry.
Perhaps “legalized extortion” can get together with some people of like mind and form their own insurance company with money that they have raised. I am willing to bet that at that point that entire risk versus reward concept would kick in. There is nothing like a little “skin in the game” to make clear in a hurry how much is at stake.
Why does Allstate put up with the Mickey Mouse Parade put on by Gallagher?
just let Gallager dictate anuything he wants.
As a company CEO get some backbone and decide whether you can make money or not back on the Mickey Mouse process.
if you can’t…get out of the state and let someone else lose money. The odds are most of it will end up in a state JUA anyway and you can let all of the inland people subsidize the morons who build right on the water. When it tanks bad enough ask for federal assistance and let everyone in the US pay.
if you can.. stay in and do the job right.
either way why listen and tolerate this garbage and stupidity from someone like him. Fight back and point out the pandering nature of this clown.
This guys sums up all that is wrong with the American system right now. He is nothing but a political hack that will sacrifice a key part of the states economy so as to garner more votes.
Even a moronic Floridian can figure out that if you are losing money in Florida you have to make an extraordinary profit elsewhere. A competitive marketplace is not going to allow you to make excessive profits for long so you are better off bailing out in a money losing state than counting on another state to offset it.
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6-23-2005
When individuals, that are not satisfied with more than enough being enough, eventually meet up with those that have had enough of their profiteering antics, negative and positive market changes happen.
Contrary to their public claims, Allstate should stop putting profits before people, because people will eventually see that all of their feel good commercials and smiling agents are just another form of ‘opium’ for the masses.
Smuggly challenging the law and the general public good…what arrogance.
Certain Mafia type bullies-individuals have tried to control the public and government in the recent past…and failed.
Liddy may want to research, and reflect on, why they failed.
rogerpoe@acnet.net
I recognize that in Florida, insurer’s are facing difficult decisions. After last years unprecedented losses, the market is hardening (especially from the reinsurance side) and the “heralds of hurricanes” tell us this is just the beginning of an upswing of the frequency and severity of storms.
If Allstate feels that it needs 28% more to insure their exposure and decides to use and file, then so be it. If it countermands an order by the Department, then they can levy a fine. The fact is that there are more companies coming into the market every day. Companies taking policies out of Citizens as start ups, companies like Universal who are willing to offer renewals to the Allstate Floridian policyholders who are being non-renewed, as well as existing insurers who I’m sure would welcome the opportunity to pick up some business to balance their exposure and PML.
The fact is that the market will level itself out. I hear where Mr. Gallagher is coming from… he doesn’t want Allstate to set precedent that others will follow. But he and Commissioner McCarty have the means to make it very uncomfortable for those carriers who take this route. I would urge them to do exactly that. After Andrew, there was a moratorium on non-renewing of business, limiting the percentage of total policies to be non-renewed and the geographic spread of those “undesireable” risks. While this produced a lot of wailing and gnashing of teeth amongst the insurers, they found a way to get by.
Again, the market will level itself. Let’s not get anxious over one nsurer’s ‘greed’, if that is in fact what it is. Allstate has never been the cheapest of products and there are more than enough admitted companies like Vanguard, First Protective, Coral, the newly founded Gulfstream and others that will happily come in with ISO paper, a solid Demotech rating and the surplus to carry the exposure and will take the biggest pieces of the pie. The crumbs that are left over will end up in Citizens, which is probably where they belong.
I am assuming that “been around” has not had to face a 200% increase in HO insurance recently… $2400 per year for HO insurance on a $200,000 home is pretty rediculous… most of us cannot afford this, personally there goes my half my grocery money every month.. the american dream, owning your own home… well not any more… cheaper to rent and pay renters insurance… something has to be done at the state level to stop these insurance companies from charging these rates… they are no different from the MOB!
Actually, I have been facing just the same increases as you have. I perosnally am paying over $4000 a year. So trust me, I understand where you are coming from and I feel the pain as well.
What I’m pointing out is that if you shop around (assuming you aren’t living directly on the water, or in northern Pinellas or Pasco County), you should be able to find a better rate for the same coverage. It’s like car insurance. Someone out there will always give you a better rate (as long as you don’t have significant claims against your current homeowners carrier).
I know that sometimes it feels like the insurance company is just jacking up rates to make more profit, but trust me when I say that is not the case. The costs for reinsurance is skyrocketing, interest rates are still low and the margin for profit is extremely slim. Add on top of that last year’s storms (which for some of the smaller carriers, wiped out all of the profits they have acquired since Andrew in ’99)and it is a tough time for those of us who are “in the business”, as well as the consumers in the state.
The price of a product needs to be at least what the provider expects the costs to be. If the price of beef is going up your cheeseburger needs to cover the cost of your next beef purchase. Your cheeseburgers may be a little high-priced this week, but next week when your competition can only buy the buns, you will still be able to offer the whole burger.
If the provider has miscalculated the costs and keeps his price too high he will suffer the loss of market and his competition will capture that market.
Insurance regulators need to monitor for solvency. It is their first responsibility. After Hurricane Andrew it was very apparent the regulators hadn’t been monitoring for solvency. They just gathered for the company closings like Elvis impersonators at shopping center grand openings.
Let competition worry about lowering the rates. Make sure the regulators see that the rates are adequate for solvency.
Gee, “been around”, with $50.00 and a cup of coffee, ~ I ~ can get an A+ rating from demotech. Demotech is a ***** for unscrupulous companies
I find this whole approach used by Allstate offensive. I think that every company that opperates in the state of Florida should have to operate at the rate structure mandated by Tom Gallagher.
Tom obviously is smarter and much more knowledgeable than those criminal insurance company actuaries. I also am sure that people investing in stock in these companies will have no problem is losing money for the priveledge of operting in FL.
I am also fairly certain that policyholders in other states will have no problem in subsidizing Florida Policyholders. After all we can’t expect people who live in million dollar homes in coastal wind zone areas to pay more than someone in a brick house in Des Moine Iowa. That would be grossly unfair to the Florida policyholder.
I am pretty sure that Tom Gallager has all of the Floridians interest at heart when he publishes his mandates and edicts.
The rest of the country just does not understand how difficult it is to rule, er I mean, oversee the indusurance industry. It is a good thing that we have altruistic and benevolent people such as Tom keeping an eye out for Floridians everywhere.
I would have thought that most readers of the Insurance Journal would be a little more savy about the economics of insurance.
Insurance companies are in the business of making money (which is not a bad thing because that’s what most people are trying to do). Are they making too much money? If you think they are, then here’s your chance to cash in. Invest in an insurance company. Better yet, start up your own insurance company and provide a homeowners market in Florida that everyone can afford. Believe me, if you build it…they will come! Oh wait, you say that you did come checking and that, over time, insurance companies have lower rates of return than most other industries. If they’re making so much money as you say, why aren’t their returns better than many other industries. Oh, I remember now. Hurricanes! When the big one (or four smaller ones) come along every ten years or so and wipe out all ten years of Florida profits, it’s hard to have a good return on equity.
I live in Florida (and I to pay the high rates) and I also work for a property and casualty insurer. Believe me when I say that it’s not that easy to make a profit here. If we want multiple players in the Florida market with products priced right, it may not be at a price we would like, but rather at a price that’s needed.
“legalized extortion” needs to understand basic business strategy. Insurance companies are in the business of making money, and providing a return for their stockholders. Under pricing coverage or accepting risks without consideration of the risk they are taking is not good business sense.
It sounds like you made a decision to live in an area prone to hurricane damage; pay the costs associated with living in a hurricane prone area or move. My wife and I recently bought a house that backs to brush in Southern California, and we had to search long and hard for a carrier that would write homeowners coverage for us. Most carriers did not want to write us due to our proximity to brush. As you can imagine, our costs went up dramatically. We understood what we were getting into, and we were prepared to pay more to live next to the brush.
We all make decisions on where we CHOOSE to live. There are costs associated with those decisions. Insurance is not an entitlement. Insurance companies are in the business of making money; with the combination of the entitlement attitude of much of the public, legislation that reduces their ability to truly underwrite (credit scoring, past claims, etc…) it is a wonder that we have the healthy competition that we do have in this industry.
Perhaps “legalized extortion” can get together with some people of like mind and form their own insurance company with money that they have raised. I am willing to bet that at that point that entire risk versus reward concept would kick in. There is nothing like a little “skin in the game” to make clear in a hurry how much is at stake.
Alan.
Why does Allstate put up with the Mickey Mouse Parade put on by Gallagher?
just let Gallager dictate anuything he wants.
As a company CEO get some backbone and decide whether you can make money or not back on the Mickey Mouse process.
if you can’t…get out of the state and let someone else lose money. The odds are most of it will end up in a state JUA anyway and you can let all of the inland people subsidize the morons who build right on the water. When it tanks bad enough ask for federal assistance and let everyone in the US pay.
if you can.. stay in and do the job right.
either way why listen and tolerate this garbage and stupidity from someone like him. Fight back and point out the pandering nature of this clown.
This guys sums up all that is wrong with the American system right now. He is nothing but a political hack that will sacrifice a key part of the states economy so as to garner more votes.
Even a moronic Floridian can figure out that if you are losing money in Florida you have to make an extraordinary profit elsewhere. A competitive marketplace is not going to allow you to make excessive profits for long so you are better off bailing out in a money losing state than counting on another state to offset it.