Posted On: June 6, 2006, 4:47 pm CDT

Posted By: dw

As an independent agent selling Earthquake with all of my companies I am glad to pick up the numerous new business clients from Allstate. However, this is not a good thing for the industry. When a big company like Allstate decides they can do this than the little guys tend to follow suit. However, I guess that will remain to be seen. I agree with Rick that the purpose of insurance is to cover risk and Earthquake is a big risk that should be covered. If they manage it properly, purchase the right amount of reinsurance, and charge the right premium, they should be able to pay the claims when they come. Bottom line is Allstate wants big returns but small risk. Their poor management practices is finally catching up with them and they will lose market share. They might as well try to exclude wind, hail, and fire while their at it.