Declarations

Many Insurers, Inadequate Prices

“The urgings of Wall Street, pressures from the agency force and brokers, or simply a refusal by a testosterone-driven CEO to accept shrinking volumes has led too many insurers to write business at inadequate prices. ‘The other guy is doing it so we must as well’ spells trouble in any business, but none more so than insurance.”

—Warren Buffett, chairman of Berkshire Hathaway, in his annual letter to shareholders. Berkshire Hathaway, which makes much of its money on insurance and investing insurance premiums, does not provide liability insurance for its own directors, Buffett also revealed.

A Shameful Way to Make Money

“The act of insurance fraud is a shameful way to make a dollar. Innocent victims can be financially ruined, and it hurts us all in the form of higher insurance premiums. … It’s important that Ohioans use the resources provided by the Department to learn how to prevent insurance fraud and to not be afraid or embarrassed to call us if they have been victimized. We are here to protect Ohioans.”

—Ohio Lieutenant Governor and Insurance Director Mary Taylor. In 2010, the Ohio Department of Insurance opened more than 160 consumer insurance fraud cases, referring 80 for prosecution, and handled more than 1,200 agent misconduct cases, taking administrative action in 250.

A Hardening Market?

“I think we’re going to see continuance of deterioration of underwriting losses, fewer reserves released, continuance of low investment yields. And so, each of those three things are pointing towards a hardening market and a continuance of that.”

—Jon Wright, SNL Financial’s director of insurance. New analysis by Virginia-based SNL Financial concludes that insurance prices are rising and the prolonged soft market is ending, contrary to earlier reports from other analysts. SNL said personal lines pricing is definitely hardening and commercial lines is moving in that direction such that premium increases can be expected in the coming quarters.

Topics Fraud