Posted On: July 1, 2009, 2:10 pm CDT

Posted By: Confused

Pay out of profit!!!??? No I do not expect the insurance company to pay anything out of profit. I expect them to price their product so that they can make a profit; and a fair one. The reason for the confusion, (IF YOU READ THE ARTICLE)is that the article states that reinsurance rates are stable. I have been hearing for 5 years that the reason companies are retreating from the coast is due to increased reinsurance cost, or lack of reinsurance availability. The article is stating that there is stablility in pricing and adequate capacity. If that is the case, then the insurance companies should be able to adequately estimate reinsurance cost and build that cost into the price of their product. Now if that pricing is above residual markets than I can begin to understand. With the exodus of companies I do not think that many insurance departments are going to deny any companies rate increases, especially if they are willing to enter a coastal market, with a justifieable price. Neither of us are teachers Realistic, but that does not justify us not understanding and being confused.