I like how my small business customers are getting the rate hikes… NO! I really don’t like that. Seems like those who can least afford it continue to get big and bigger bites taken out of their checkbooks.
Be careful on the leap that a higher rate hike for smaller businesses is inequitable. You are comparing apples to oranges. Many larger risks have loss sensitive plans therefore more of their premium is service based and does not fluctuate as wildly. Also the rates do not reflect the losses they pay. So they very well could be paying the same for the cost of risk in premium and loss.
Many companies are offering enhanced coverages to stay competitive. If that is the case, are we really seeing increases that will lead to enhanced profitability?
Travelers has a 108 percent loss ratio comming out of the third quarter due to cat losses, they have no choice. They aren’t raising rates because they feel like it or want to help the market.
He’s a liar. I had lunch with two senior underwriters at Travelers last week. They are still buying business like there’s no tomorrow. They said they only quote increases on distressed renewals, hoping they will go away. Otherwise, they are doing whatever it takes to write new business or keep good renewals. Fishman is blowing smoke up the investors’ dresses. I think he’s trying to influence the market so he can take credit for something he’s really not done – that is, increase rates.
I see it on some of their renewals but not new business. Still bending over for the new submissions! Doesn’t seem to make sense.
I like how my small business customers are getting the rate hikes… NO! I really don’t like that. Seems like those who can least afford it continue to get big and bigger bites taken out of their checkbooks.
Be careful on the leap that a higher rate hike for smaller businesses is inequitable. You are comparing apples to oranges. Many larger risks have loss sensitive plans therefore more of their premium is service based and does not fluctuate as wildly. Also the rates do not reflect the losses they pay. So they very well could be paying the same for the cost of risk in premium and loss.
In response to spins22: They price the new submissions low enough to get them in the door, then get the rates they want on renewals.
Maybe this will initiate the drive to a hard market, but I still wouldn’t hold my breath for a while.
They have to raise rates to pay Mr. Fishman’s (the CEO) more than $20 million annual salary.
Maybe if they cut the CEO pay to $2 or $3 mill/year from a couple of hundred million, the could lower rates.
2-3 mm for a would is a drop in the bucket for a $25bb company and would have almost no impact on rates.
Many companies are offering enhanced coverages to stay competitive. If that is the case, are we really seeing increases that will lead to enhanced profitability?
Good point.
Travelers has a 108 percent loss ratio comming out of the third quarter due to cat losses, they have no choice. They aren’t raising rates because they feel like it or want to help the market.
Any idea what Travelers loss ratio would be without those cat losses?
It should be in the financial statement. I have not had time to look but it often reported there.
There will not be any evidence in the 10Q to support his statement.
He’s a liar. I had lunch with two senior underwriters at Travelers last week. They are still buying business like there’s no tomorrow. They said they only quote increases on distressed renewals, hoping they will go away. Otherwise, they are doing whatever it takes to write new business or keep good renewals. Fishman is blowing smoke up the investors’ dresses. I think he’s trying to influence the market so he can take credit for something he’s really not done – that is, increase rates.