Gentlemen: Please load your weapons and take careful aim at your foot.
At some point, insurance companies need to get realistic and look at LONG term pricing so that we aren’t looking for 200 – 300% increases in the next couple of years. We will never be able to have the status of “professional” until we can stop the price swings and knee jerk reactions to things like “toxic” mold and the like.
We are always going to see those “mavericks” underpricing accounts to become a hero to their clients.
However, we need to remember what these
“heroes” did to the marketplace a decade ago! They gave it away & the poor retail community had to take the responsibility of explaining hard & soft markets to their insureds. We’re just starting to heal from 9/11. Let’s make the “P” in pricing an account mean professionally underwritten!
It’s too early for a soft market. With the continued insolvencies, including Kemper, Reliance, Atlantic Mutual, Providence-Washington; the merger activity and recent downgrades of other major carriers, a stagnating Dow, terror concerns and a disruptive Presidential campaign, it is not the right time for carriers to throw caution to the wind and pretend it is 1995 all over again.
Companies need to start the process by forecasting an underwriting profit, instead of a loss, and expecting investment income to offset all the poor decisions made every day. What other industry plans a breakeven, or worse, each year and thinks that investors will stand in line to own a piece of that pie?
The problem lies in upper management. Until we have Insurance Company CEO’s lead instead of follow you will continue to see this trend. More companies need to follow the example of Selective Insurance Company’s Greg Murphy. Look at their results over the long haul. Insurance companies have been led by investment people who are trying to provide a higher than normal investment gain in an industry that should be in people’s bond funds not equity funds. Insurance is too important to risk the entire industry for the sake of luring in investors who just want to make a quick buck. Give me 7% a year with steady growth and a decent underwriting profit each year instead of 20% with huge market swings in pricing and underwriting results that stink any day.
Where is their data coming from? I am still seeing increases in commercial rates and premiums. Yes, competition seems to have opened up some–but what about the “hot spots”, DC NY TX LA etc. Markets are very restrictive and most carriers unwilling to offer coverage due to “capacity”.
Yes, well said Mr. Megill, I will take a steady small managable increase rather than the stance some National carriers have taken with huge increases over 25%. In fact, we have one carrier who is still taking these increases.
I agree with Mr. Megill that the CEO’s and corporate excecutives should be the ones leading by example. It is unfortunate in this day and age that too many of the higher-ups come from financial disciplines rather than a true insurance background. They try to manage and run their company like a financial institution rather than acknowledging the unique characteristics of an insurance organization.
Gentlemen: Please load your weapons and take careful aim at your foot.
At some point, insurance companies need to get realistic and look at LONG term pricing so that we aren’t looking for 200 – 300% increases in the next couple of years. We will never be able to have the status of “professional” until we can stop the price swings and knee jerk reactions to things like “toxic” mold and the like.
I think 15% is little on the high side, remember once we see a terrorist act or major hurricane this year all bets would be off!
We are always going to see those “mavericks” underpricing accounts to become a hero to their clients.
However, we need to remember what these
“heroes” did to the marketplace a decade ago! They gave it away & the poor retail community had to take the responsibility of explaining hard & soft markets to their insureds. We’re just starting to heal from 9/11. Let’s make the “P” in pricing an account mean professionally underwritten!
It’s too early for a soft market. With the continued insolvencies, including Kemper, Reliance, Atlantic Mutual, Providence-Washington; the merger activity and recent downgrades of other major carriers, a stagnating Dow, terror concerns and a disruptive Presidential campaign, it is not the right time for carriers to throw caution to the wind and pretend it is 1995 all over again.
Companies need to start the process by forecasting an underwriting profit, instead of a loss, and expecting investment income to offset all the poor decisions made every day. What other industry plans a breakeven, or worse, each year and thinks that investors will stand in line to own a piece of that pie?
The problem lies in upper management. Until we have Insurance Company CEO’s lead instead of follow you will continue to see this trend. More companies need to follow the example of Selective Insurance Company’s Greg Murphy. Look at their results over the long haul. Insurance companies have been led by investment people who are trying to provide a higher than normal investment gain in an industry that should be in people’s bond funds not equity funds. Insurance is too important to risk the entire industry for the sake of luring in investors who just want to make a quick buck. Give me 7% a year with steady growth and a decent underwriting profit each year instead of 20% with huge market swings in pricing and underwriting results that stink any day.
Well said, Mr. Megill!
Where is their data coming from? I am still seeing increases in commercial rates and premiums. Yes, competition seems to have opened up some–but what about the “hot spots”, DC NY TX LA etc. Markets are very restrictive and most carriers unwilling to offer coverage due to “capacity”.
Yes, well said Mr. Megill, I will take a steady small managable increase rather than the stance some National carriers have taken with huge increases over 25%. In fact, we have one carrier who is still taking these increases.
I agree with Mr. Megill that the CEO’s and corporate excecutives should be the ones leading by example. It is unfortunate in this day and age that too many of the higher-ups come from financial disciplines rather than a true insurance background. They try to manage and run their company like a financial institution rather than acknowledging the unique characteristics of an insurance organization.