Declarations

April 21, 2008

P/C Consolidation

“The logic of consolidation within the property and casualty industry, particularly in North America, may be gaining favor as the economy slows and as rates soften. However, our research suggests that analysts might not fully value these transactions without a clear linkage to organic growth or until efficiencies are realized.”

—John Del Santo, managing director of Accenture’s Insurance practice in North America, commenting on the findings of a global survey by his company. The study indicated that 71 percent of insurance equity analysts expect a significant increase in property/casualty mergers and acquisitions this year. At the same, the findings indicated P/C analysts in North America three times as likely as those in Europe to predict a significant increase in mergers and acquisitions activity.

Giving Space to Gen X and Y

“[G]et out of the way when the young agents are ready to move in. They’re the brightest, the sharpest, the most highly educated group of people that we’ve ever encountered in this industry and they do bring us a lot of talent and a lot of good ideas. What we need to be doing is assisting them in becoming better salespeople and working with the consumer.”

—Robert Fulwider, chairman of the Independent Insurance Agents and Brokers of America (the Big “I”) and an independent agent from Iowa, commenting on young agents in the industry, agency perpetuation, and communication between the industry’s Baby Boomers, Gen X’ers and Gen Y’ers.

Hurricanes on the Horizon

“The past two years have been quieter for insurers, but meteorological research indicates that we still experienced an uptick in North Atlantic hurricane activity. This is a trend that is likely to continue for several years, so insurers must prepare themselves to withstand losses in the event of another catastrophic landfall.”

—Alice Gannon, senior consultant of actuarial consulting firm EMB America, warning the insurance industry to prepare for hurricane risks. Hurricanes pose the greatest act of nature risk to the U.S. insurance industry for 2008. Furthermore, while hurricanes top the list of P/C insurance risk, other acts of nature, including tornadoes, earthquakes, winter storms, fire and hail must also be accounted for when insurers assess their pricing strategies, EMB advised.

California’s Business Bedrock

“Although State Fund is a public entity, we must be able to compete fairly in the private market to remain competitive and effectively balance our mix of profitable business and market-of-last-resort book if we are to remain a stabilizing force on the market. … [The] importance of State Fund’s dual role is particularly highlighted when market conditions worsen and private insurance companies scale back their product offerings. … In short State Fund must take ‘all comers’ — in good times and bad — to serve its role as the bedrock of the market.”

—California State Compensation Insurance Fund President Janet Frank commenting on SCIF’s role in the California workers’ compensation insurance market.

Topics California Catastrophe Agencies Hurricane Market Property Casualty

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Insurance Journal West April 21, 2008
April 21, 2008
Insurance Journal West Magazine

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