After Hurricane Andrew, Florida went its own way by creating its own reinsurance capacity and then its own carrier. The problem if that when the storms came, it diminished Florida capacity and was not spread through the insurance system. Instead of Florida working to spread its risks throughout the global system, they went the other way. Now they have deficits, assessments, and no reserves with another season coming. They will look for a Federal solution but won\’t get one.
They have to eliminate this Florida only stuff and let the insurance marketplace provide the hurricane coverage without subsidy.
Pat,
I think you hit the Nail on the Head, but I would think it needs to go further. The whole system needs to be crashed, purposefully. When all of the writers, in concert, unionize and either stop writings or walk out, the system will be brought to it\’s knees. The Politicals will be standing there with their \”Pants at their ankles\” Pressure would build and change would have to occur. Painfull I know, but it would beat the slow and steady death that is occuring now. Becouse the market players do not collude like this, Pray for very bad weather, the more the better. The red ink will turn most companies in a northerly direction up to the states where reason and good judgement prevail.
Unfortunately, our insurance commissioner at the time, now the state\’s \”CFO\” and gubenatorial candidate, has ruined the private market in Florida. By restricting rates, company pullbacks and the insane use of a mega residual market, he has created a socialist system that has no way to correct itself. The only option is to 1) Shut it down completely 2) Let the free market work and allow companies to charge the rates they feel are adequate and provide coverages based on the market needs and their capacity
Lets see, Citizens is in the red because it didn\’t collect enough money for the big insurance pot of money.
\”What this tells me, as CFO, is we need rate relief. This taking in of less money through rate relief will solve our problems of not taking in enough money.\”
Uh, HELLO?! Did this guy attend school in Florida?!
I\’m sure there\’s a solution in Tom\’s Karl Marx manuals-maybe…I don\’t know, how about state subsidized property rates and…well you know a Federal catastrophe program so that Kansans can help pay for the Palm Beachers insurance. Then maybe he can start collectivization of the farms and manufacturing plants. Yeah! That\’s it! We can have state ownership of all property, no one will have to work or pay for insurance or anything! I will be, while it WILL BE UTOPIA!
Recently, I was at a meeting of insurance agents where Tom Gallagher was the featured speaker. All he spoke about was the \”great job\” he did as Insurance Commissioner after Hurricane Andrew (August, 1992) by getting company CEO\’s to view the devestation by helicopter and his \”brilliant\” idea of forming the Residential Property & Casualty JUA which, several years ago, was rolled into the Florida Wind Underwriting Association and is now known as \”Citizens\”. There was no mention of a single idea for the future. I was disgusted with him in 1993 when he formed the RPCJUA as the \”real\” market was just beginning to catch it\’s breath and was starting to adjust. However, this is 2006… his plans for the future were what I was interested in hearing! Typical stump speech, but not correct for that crowd!
Governmental intervention is NEVER the answer! Especially when what the governmental entity, Citizens, is writing is EXACTLY WHAT THE VOLUNTARY MARKET DOESN\’T WANT and would be forced to charge about 10% less premium to write if they would insure it! (Citizens rates are supposed to be 10% over the top 10 company\’s rates in each county. Understand: the voluntary market isn\’t allowed to charge actuarially adequate rates, but Citizens only has to be 10% more than the already inadequate rates!) And in the real world, Citizens will write an HO-3 (special form for the dwelling, replacement cost, and replacement cost on contents) where the voluntary market will only offer an HO-8 … named peril and ACV for building and contents! As a consumer, would you give all that up: special form, replacement cost, et al, for an AP of 10% if you had a choice? (Even if you knew Citizens claim service smelled like a skunk?) Talk about adverse selection! So who is surprised Citizens is running a deficit? And then all the rest of us, both residential and commercial customers, get to bail out Citizens via assessments.
It\’s a terrible situation and I just go to work to see what the new rules will be that day. It seems every week there is an announcemnt of another company leaving Florida: recently American National, Kemper, and we\’ve already lost Safco, AXA Re, Clarendon Select; Allstate Floridian dropped 95,000 policies, Nationwide dropped a number of policies, and State Farm, Nationwide, Allstate and Farm Bureau are writing no new biz. I can\’t even remember all the rest who have withdrawn or are no longer writing new biz! Not a pretty picture, at all!
No, I will not be voting for Mr. Gallagher for governor in November. And yes, I looked it up: he graduated from the University of Miami! More\’s the pity!
First of all I have no chance of winning so don\’t pile on about another weasel or whatever you call candidates.
Second, my website (onballot.com)now shows that I gave up my effort to make the Republican primary interesting…I decided to run as an Independent (NPA) to continue the effort until November 7. 2006.
Third, I previously said I would not post another comment at insurancejournal.com but reading about someone encouraging people to pray for bad weather in Florida…well I lost it…!
Fourth, a previous post stated: \”Pray for very bad weather, the more the better, the red ink will turn most companies in a northerly direction..\” be advised: recent reports indicate the storms will be north this year so our prays for Florida have been already answered. Cool water off Florida and other factors now indicate that storms may actually be missing Florida this year. We here in Florida will continue praying for better weather and with the remaining insurance people our insurance industry will grow again.
Fifth, here is some local information about what may be actually happening: 1. More Florida homes remain unprotected by insurance at the decision of the property owner. 2. The land value exceeds the value of the old structure. 3. New homes are being purchased for cash and the property owners are not afraid to put the structure at limited risk, especially, now that the new structures are constructed better. 4. Several of my co-workers in fact have given up on property insurance for their beachside homes because the land is more valueable than what they paid for property and structure.
5. With more cash home purchases and less single family homes plus more condos well the Florida insurance market is changing. Many of the single family property owners are down sizing and purchasing condos (cash) and some working people are actually cashing in the high value homes cashed to purchase homes cash.
Okay its your turn I promise to listen to the valueable information you are presenting about Florida\’s troubled insurance industry. Enjoy!
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After Hurricane Andrew, Florida went its own way by creating its own reinsurance capacity and then its own carrier. The problem if that when the storms came, it diminished Florida capacity and was not spread through the insurance system. Instead of Florida working to spread its risks throughout the global system, they went the other way. Now they have deficits, assessments, and no reserves with another season coming. They will look for a Federal solution but won\’t get one.
They have to eliminate this Florida only stuff and let the insurance marketplace provide the hurricane coverage without subsidy.
Pat,
I think you hit the Nail on the Head, but I would think it needs to go further. The whole system needs to be crashed, purposefully. When all of the writers, in concert, unionize and either stop writings or walk out, the system will be brought to it\’s knees. The Politicals will be standing there with their \”Pants at their ankles\” Pressure would build and change would have to occur. Painfull I know, but it would beat the slow and steady death that is occuring now. Becouse the market players do not collude like this, Pray for very bad weather, the more the better. The red ink will turn most companies in a northerly direction up to the states where reason and good judgement prevail.
Unfortunately, our insurance commissioner at the time, now the state\’s \”CFO\” and gubenatorial candidate, has ruined the private market in Florida. By restricting rates, company pullbacks and the insane use of a mega residual market, he has created a socialist system that has no way to correct itself. The only option is to 1) Shut it down completely 2) Let the free market work and allow companies to charge the rates they feel are adequate and provide coverages based on the market needs and their capacity
Lets see, Citizens is in the red because it didn\’t collect enough money for the big insurance pot of money.
\”What this tells me, as CFO, is we need rate relief. This taking in of less money through rate relief will solve our problems of not taking in enough money.\”
Uh, HELLO?! Did this guy attend school in Florida?!
Politics is never a good way to run a company…let\’s keep them doing ribbon cuttings and leave the work to professionals!
Look on the brightside. At least this will make for a good sequel to \’Commanding Heights\’.
I\’m sure Bill Poe can help them on this one.
I\’m sure there\’s a solution in Tom\’s Karl Marx manuals-maybe…I don\’t know, how about state subsidized property rates and…well you know a Federal catastrophe program so that Kansans can help pay for the Palm Beachers insurance. Then maybe he can start collectivization of the farms and manufacturing plants. Yeah! That\’s it! We can have state ownership of all property, no one will have to work or pay for insurance or anything! I will be, while it WILL BE UTOPIA!
Recently, I was at a meeting of insurance agents where Tom Gallagher was the featured speaker. All he spoke about was the \”great job\” he did as Insurance Commissioner after Hurricane Andrew (August, 1992) by getting company CEO\’s to view the devestation by helicopter and his \”brilliant\” idea of forming the Residential Property & Casualty JUA which, several years ago, was rolled into the Florida Wind Underwriting Association and is now known as \”Citizens\”. There was no mention of a single idea for the future. I was disgusted with him in 1993 when he formed the RPCJUA as the \”real\” market was just beginning to catch it\’s breath and was starting to adjust. However, this is 2006… his plans for the future were what I was interested in hearing! Typical stump speech, but not correct for that crowd!
Governmental intervention is NEVER the answer! Especially when what the governmental entity, Citizens, is writing is EXACTLY WHAT THE VOLUNTARY MARKET DOESN\’T WANT and would be forced to charge about 10% less premium to write if they would insure it! (Citizens rates are supposed to be 10% over the top 10 company\’s rates in each county. Understand: the voluntary market isn\’t allowed to charge actuarially adequate rates, but Citizens only has to be 10% more than the already inadequate rates!) And in the real world, Citizens will write an HO-3 (special form for the dwelling, replacement cost, and replacement cost on contents) where the voluntary market will only offer an HO-8 … named peril and ACV for building and contents! As a consumer, would you give all that up: special form, replacement cost, et al, for an AP of 10% if you had a choice? (Even if you knew Citizens claim service smelled like a skunk?) Talk about adverse selection! So who is surprised Citizens is running a deficit? And then all the rest of us, both residential and commercial customers, get to bail out Citizens via assessments.
It\’s a terrible situation and I just go to work to see what the new rules will be that day. It seems every week there is an announcemnt of another company leaving Florida: recently American National, Kemper, and we\’ve already lost Safco, AXA Re, Clarendon Select; Allstate Floridian dropped 95,000 policies, Nationwide dropped a number of policies, and State Farm, Nationwide, Allstate and Farm Bureau are writing no new biz. I can\’t even remember all the rest who have withdrawn or are no longer writing new biz! Not a pretty picture, at all!
No, I will not be voting for Mr. Gallagher for governor in November. And yes, I looked it up: he graduated from the University of Miami! More\’s the pity!
First of all I have no chance of winning so don\’t pile on about another weasel or whatever you call candidates.
Second, my website (onballot.com)now shows that I gave up my effort to make the Republican primary interesting…I decided to run as an Independent (NPA) to continue the effort until November 7. 2006.
Third, I previously said I would not post another comment at insurancejournal.com but reading about someone encouraging people to pray for bad weather in Florida…well I lost it…!
Fourth, a previous post stated: \”Pray for very bad weather, the more the better, the red ink will turn most companies in a northerly direction..\” be advised: recent reports indicate the storms will be north this year so our prays for Florida have been already answered. Cool water off Florida and other factors now indicate that storms may actually be missing Florida this year. We here in Florida will continue praying for better weather and with the remaining insurance people our insurance industry will grow again.
Fifth, here is some local information about what may be actually happening: 1. More Florida homes remain unprotected by insurance at the decision of the property owner. 2. The land value exceeds the value of the old structure. 3. New homes are being purchased for cash and the property owners are not afraid to put the structure at limited risk, especially, now that the new structures are constructed better. 4. Several of my co-workers in fact have given up on property insurance for their beachside homes because the land is more valueable than what they paid for property and structure.
5. With more cash home purchases and less single family homes plus more condos well the Florida insurance market is changing. Many of the single family property owners are down sizing and purchasing condos (cash) and some working people are actually cashing in the high value homes cashed to purchase homes cash.
Okay its your turn I promise to listen to the valueable information you are presenting about Florida\’s troubled insurance industry. Enjoy!