I attended the hearings yesterday and it is clear, politicians have no understanding of capacity, frequency and severity. Their lack of understanding is frightning, since these hearings will end up doing more harm than good for the Florida consumer. The legislative panel has not idea what the impact of over capacity will do to an insurance company, they have no idea how responsible insurance companies use models to determine their exposure and actual cost of frequency of claims and severity of claims.
You have to love these so-called consumer actuaries, who can do anything with numbers to dispute insurance companies filed and approved rate models.
The last sentence in the aritle brought up the $1 billion stock buy-back. The billion dollars is the companies nationwide profit, not just from Florida. Imagine a For-Profit company getting their financials in order to prepare for potential catastrophic occurrences. May polticians on the local, state and federal levels should adopt this approach!
It’s interesting how quickly these legislators have forgotten about the insolvencies that ocurred from the 2004/2005 seasons. Poe Financial, reckless underwriting I agree, was the 3rd largest in the state and didn’t make it.
Additionally, if they want to crunch data, why not look at the huge deficits that Citizens has run since the 2004/2005 seasons. Why would lawmakers think that any private company could charge a lower rate than Citizens and not face the same outcome as Citizens.
We have plenty of carriers available now in Florida. The problem is that most of them are “investment outlets” and will reap the profits while it’s quiet and leave when they’re bankrupted. That’s not insurance.
I agree with Mark, that’s NOT insurance, it’s gouging, rape, and criminal. At least it should be criminal. My company is spending a lot of time trying to make lawmakers understand the importance of maintaining capacity and how Ins Companies that incorporate overseas are really bad for the US Ins industry and it’s capacity-stability. Unfortunately, it appears we are not winning; and for some reason, there is more money behind the “evil” lobbyists and the “investment outlets” so they are getting the sway. I don’t understand how this is. Unless these investors believe that de-stabilizing the Insurance Industry is going to somehow create a fertile landscape of more money-making oppurtunities.
Mark, it was disclosed yesterday that the OIR may have missed something with Poe’s financials. They admitted that they thought they were solvent based on the financials submitted, but they are now going back to see what they missed.
However, the legislature is hell bent on grilling the companies and tearing them apart, what a great PR move. But they should look in their own house since Citizens is being bankrolled by Floridians. Who are they (the legislature)going to answer to when a CAT storm hits and Citizens with a $2billion line of credit to pay claims does not have enough money to pay those claims.
Presently there are two Citizens assessments on your insurance policies for previous years. Will there have to be 4 or 5 assessments? And how much will Floridians have to pay?
It appears that Citizens is trying desperately to have more companies “Take-Out” business to reduce their “Exposure”. So the standard markets are making their market share assessments to get a hold of their exposure and are making a prudent business decision regarding their capacity to write in Florida.
Imagine doing a risk assessment has Citizens done a thorough investigation of themselves? I say not. The Governor and Legislature just don’t get it, but it looks good on tv, doesn’t it.
TAR,interesting that you attended this event. Thanks for the info. In my mind, right or wrong, the Citizens “takeout” strategy doesn’t solve much. Customer’s policies are being removed from Citizens to other carriers that are unknown from a service and claims handling perspective. True, Citizens does not have a great track record, however if I were a policyholder, I would probably want Citizens to handle my claim when a large disaster occurs in lieu of or a “takeout” company. Why? The Governor has stuck his neck out with supressing Citizens rates & relaxing guidlines. I would think he’s more likely to “bird dog” Citizens claims handling on the next round of major losses.
I find it ironic that they won’t accept the risk modeling practice(s) of Allstate as justification for their requested rate increases, but yet they will offer Hartford an approved rate increase to keep them from non-renewing 27,000 homeowners policies… all at the same place at the same time… oxyMORONS.
Great point Deb. I knew there was something wrong with their comment yesterday concerning granting the Hartford a rate increase to stay.
The Senator did not like the: “We have reached our capacity” answer.
In my state AARP swamps elderly people with mailings that they can save them money on their Homes and Autos. Here, Hartford is the actual carrier even though most of the elderly customers think somehow that AARP is in the insurance business.
Do any of you know if AARP uses Hartford in Florida?
Regardless, I am not knocking Hartford. Florida will see fewer companies try to do business there because of their attack on Allstate. Most companies are not willing to take a chance on the litigation exposure or attack by politicians that are now a cost of doing business in that state.
GT you represent a large uninformed section of the population that does not understand two things:
Corporations have to make a profit to keep operating and in the case of insurance to pay claims. (Profits also are what attract other competitors into the market place to give consumers choices!)
Second, Some years have good profits and some years have losses. What percentage of the price of a share of stock has the Hartford stockerholder recieved as a dividend over the past 10 years? Was it really excessive?
Finally, a question for you…If you were in charge of Hartford and it operated in all 50 states. Would you operate in FL and take a loss, or use your resources in states you can make a profit?
There are many stockholders that demand profits and good decisions or you cannot run their company. In addition to stockholders, there are thousands of agents relying on Hartford to make an income and thousands of Company Employees that underwrite, process claims, and administer the business. These people count on a leadership that makes the company profitable so they can have jobs and income. These same investors and employs spend money that drives our economy!
TAR asks who the govt. is going to answer to when the big one hits and wipes out Citizens? To get the answer, you have to think like a politician, not an insurance man.
An insurance company knows it has to clean up its own mess and acts insure the appropriate amount of consumers.
However, the Florida politicians know they won’t have to clean up any mess. Washington politicians will fall over themselves to make Floridians whole. Any president wanting re-elected will capitulate and every midwest congressman hoping to get a vote on pork to bring home to his own district will sign off on an aid package.
It’s no wonder we live in an era without personal responsibility when our government can’t even exercise it.
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I attended the hearings yesterday and it is clear, politicians have no understanding of capacity, frequency and severity. Their lack of understanding is frightning, since these hearings will end up doing more harm than good for the Florida consumer. The legislative panel has not idea what the impact of over capacity will do to an insurance company, they have no idea how responsible insurance companies use models to determine their exposure and actual cost of frequency of claims and severity of claims.
You have to love these so-called consumer actuaries, who can do anything with numbers to dispute insurance companies filed and approved rate models.
The last sentence in the aritle brought up the $1 billion stock buy-back. The billion dollars is the companies nationwide profit, not just from Florida. Imagine a For-Profit company getting their financials in order to prepare for potential catastrophic occurrences. May polticians on the local, state and federal levels should adopt this approach!
It’s interesting how quickly these legislators have forgotten about the insolvencies that ocurred from the 2004/2005 seasons. Poe Financial, reckless underwriting I agree, was the 3rd largest in the state and didn’t make it.
Additionally, if they want to crunch data, why not look at the huge deficits that Citizens has run since the 2004/2005 seasons. Why would lawmakers think that any private company could charge a lower rate than Citizens and not face the same outcome as Citizens.
We have plenty of carriers available now in Florida. The problem is that most of them are “investment outlets” and will reap the profits while it’s quiet and leave when they’re bankrupted. That’s not insurance.
I agree with Mark, that’s NOT insurance, it’s gouging, rape, and criminal. At least it should be criminal. My company is spending a lot of time trying to make lawmakers understand the importance of maintaining capacity and how Ins Companies that incorporate overseas are really bad for the US Ins industry and it’s capacity-stability. Unfortunately, it appears we are not winning; and for some reason, there is more money behind the “evil” lobbyists and the “investment outlets” so they are getting the sway. I don’t understand how this is. Unless these investors believe that de-stabilizing the Insurance Industry is going to somehow create a fertile landscape of more money-making oppurtunities.
Mark, it was disclosed yesterday that the OIR may have missed something with Poe’s financials. They admitted that they thought they were solvent based on the financials submitted, but they are now going back to see what they missed.
However, the legislature is hell bent on grilling the companies and tearing them apart, what a great PR move. But they should look in their own house since Citizens is being bankrolled by Floridians. Who are they (the legislature)going to answer to when a CAT storm hits and Citizens with a $2billion line of credit to pay claims does not have enough money to pay those claims.
Presently there are two Citizens assessments on your insurance policies for previous years. Will there have to be 4 or 5 assessments? And how much will Floridians have to pay?
It appears that Citizens is trying desperately to have more companies “Take-Out” business to reduce their “Exposure”. So the standard markets are making their market share assessments to get a hold of their exposure and are making a prudent business decision regarding their capacity to write in Florida.
Imagine doing a risk assessment has Citizens done a thorough investigation of themselves? I say not. The Governor and Legislature just don’t get it, but it looks good on tv, doesn’t it.
TAR,interesting that you attended this event. Thanks for the info. In my mind, right or wrong, the Citizens “takeout” strategy doesn’t solve much. Customer’s policies are being removed from Citizens to other carriers that are unknown from a service and claims handling perspective. True, Citizens does not have a great track record, however if I were a policyholder, I would probably want Citizens to handle my claim when a large disaster occurs in lieu of or a “takeout” company. Why? The Governor has stuck his neck out with supressing Citizens rates & relaxing guidlines. I would think he’s more likely to “bird dog” Citizens claims handling on the next round of major losses.
I find it ironic that they won’t accept the risk modeling practice(s) of Allstate as justification for their requested rate increases, but yet they will offer Hartford an approved rate increase to keep them from non-renewing 27,000 homeowners policies… all at the same place at the same time… oxyMORONS.
Great point Deb. I knew there was something wrong with their comment yesterday concerning granting the Hartford a rate increase to stay.
The Senator did not like the: “We have reached our capacity” answer.
In my state AARP swamps elderly people with mailings that they can save them money on their Homes and Autos. Here, Hartford is the actual carrier even though most of the elderly customers think somehow that AARP is in the insurance business.
Do any of you know if AARP uses Hartford in Florida?
Regardless, I am not knocking Hartford. Florida will see fewer companies try to do business there because of their attack on Allstate. Most companies are not willing to take a chance on the litigation exposure or attack by politicians that are now a cost of doing business in that state.
TAR thanks for the info.
GT you represent a large uninformed section of the population that does not understand two things:
Corporations have to make a profit to keep operating and in the case of insurance to pay claims. (Profits also are what attract other competitors into the market place to give consumers choices!)
Second, Some years have good profits and some years have losses. What percentage of the price of a share of stock has the Hartford stockerholder recieved as a dividend over the past 10 years? Was it really excessive?
Finally, a question for you…If you were in charge of Hartford and it operated in all 50 states. Would you operate in FL and take a loss, or use your resources in states you can make a profit?
There are many stockholders that demand profits and good decisions or you cannot run their company. In addition to stockholders, there are thousands of agents relying on Hartford to make an income and thousands of Company Employees that underwrite, process claims, and administer the business. These people count on a leadership that makes the company profitable so they can have jobs and income. These same investors and employs spend money that drives our economy!
TAR asks who the govt. is going to answer to when the big one hits and wipes out Citizens? To get the answer, you have to think like a politician, not an insurance man.
An insurance company knows it has to clean up its own mess and acts insure the appropriate amount of consumers.
However, the Florida politicians know they won’t have to clean up any mess. Washington politicians will fall over themselves to make Floridians whole. Any president wanting re-elected will capitulate and every midwest congressman hoping to get a vote on pork to bring home to his own district will sign off on an aid package.
It’s no wonder we live in an era without personal responsibility when our government can’t even exercise it.