Katrina, Asbestos, Soft Market Test Mettle of Today's Bright CEOs
Features • October 3, 2005
But SOX May Be What Really Keeps Them Focused on Financial Strength
Industry pundits have praised today's insurance chief executive officers as better informed and more disciplined than their ...
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Subject: Our Insurance Industry
Posted On: December 20, 2005, 9:13 pm CST
Posted By: Jo Ellen Powers
Comment:
These comments may not fit exactly with this article, but I would like for the following points to be considered (I consider them to be far more important than just SOX):
1. Since insurance is based upon the Law of Large Numbers, IF some people chose to live in interesting, but catastrophic prone areas (such as earthquake, volcanic activity in the Cascades, landslides, and known hurricane areas-to name some)WHY should the rest of the folks who live in "normal" areas be required to subsidize their resulting claims???? Their Risk is very high-just like those who chose to live in an area known to flood frequently.. If we try to transfer this obligation to the Federal Government, the regular citizen still pays through
taxes. I vote for making these people pay an appropriate rate for their "insurance" or move to a safer area!!! Let their POLITICIANS try to fight that.
2. In my opinion, the so called Hard and Soft market cycles (which are ostensibly to gain or not lose market share) are ridiculous. They only serve to further convince the public that Insurance Companies are crooks who MUST be regulated by the State. Talk to your shareholders. Face up to the competition and just sit tight until this cycle of "rates too low and then rates too high"
mellows out. Then, any truely competitive advantage can become apparant. Maybe the public turmoil will start to lessen and so will State Regulation. As it is now, we just look like we don't know what we are doing.....talk to any agent who has to explain hard and soft market cycles to John Doe!
3. As far as the Government lending assistence so that the Insurance Industry can write coverage for Terrorism, tell the Government that we cannot begin to calculate a rate for this. If we cannot rate it, we can not write it. Just like any other seller of goods and services, we must have an idea of the cost of a product or we can't sell it! You don't see the Government asking Proctor & Gamble to just sell a product without having some idea of what it's cost will
be. Why is the Insurance Industry so different????
Anyhow,in the Information Boom, it seems to me that the wise Executive would be using this information to protect his company/owners from brow-beating by politicians!!! This includes the Federal Government!!
I am sure that my ideas are simplistic, but sometimes getting down to brass tacks is just what needs to be done.
Respectfully,
Jo Ellen Powers
Subject: Our Insurance Industry
1. Since insurance is based upon the Law of Large Numbers, IF some people chose to live in interesting, but catastrophic prone areas (such as earthquake, volcanic activity in the Cascades, landslides, and known hurricane areas-to name some)WHY should the rest of the folks who live in "normal" areas be required to subsidize their resulting claims???? Their Risk is very high-just like those who chose to live in an area known to flood frequently.. If we try to transfer this obligation to the Federal Government, the regular citizen still pays through
taxes. I vote for making these people pay an appropriate rate for their "insurance" or move to a safer area!!! Let their POLITICIANS try to fight that.
2. In my opinion, the so called Hard and Soft market cycles (which are ostensibly to gain or not lose market share) are ridiculous. They only serve to further convince the public that Insurance Companies are crooks who MUST be regulated by the State. Talk to your shareholders. Face up to the competition and just sit tight until this cycle of "rates too low and then rates too high"
mellows out. Then, any truely competitive advantage can become apparant. Maybe the public turmoil will start to lessen and so will State Regulation. As it is now, we just look like we don't know what we are doing.....talk to any agent who has to explain hard and soft market cycles to John Doe!
3. As far as the Government lending assistence so that the Insurance Industry can write coverage for Terrorism, tell the Government that we cannot begin to calculate a rate for this. If we cannot rate it, we can not write it. Just like any other seller of goods and services, we must have an idea of the cost of a product or we can't sell it! You don't see the Government asking Proctor & Gamble to just sell a product without having some idea of what it's cost will
be. Why is the Insurance Industry so different????
Anyhow,in the Information Boom, it seems to me that the wise Executive would be using this information to protect his company/owners from brow-beating by politicians!!! This includes the Federal Government!!
I am sure that my ideas are simplistic, but sometimes getting down to brass tacks is just what needs to be done.
Respectfully,
Jo Ellen Powers