How does IJ spin the story of enormous profits into “Underwriting HurtInsurer’s Bottom Lines in 2007”. Carriers turned $61B in profits — with the LOWEST COMBINED RATIO in recent history (best was in 1959!). Who is hurting? Not me, not my clients, not the carriers. The bottom line is strong, the market remains soft, and pricing will continue soft as long as the carriers continue to make money. Seems to me NO ONE is hurting, especially the carriers. They have plenty of $$ now to put into surplus, maintain and/or incresae their “Best Rating” and weather any further storms coming along. Hurting? Baloney!
Old Pro, if you had read the article you would have seen this paragraph. “Even so, underwriting results weren’t good enough for insurers to achieve the rate of return typically earned by firms in other industries, said Murray. Fortune 500 firms, for instance, have a 13.9 percent long-term average rate of return, he said.” Companies that don’t make a decent rate of return don’t get capital. Basic economics. Poor underwriting in these cycles always kills our capital influx. I have been around long enough to see us shoot ourselves in the foot several times. We never learn, you should have.
I think you missed the point of my comment. Our industry is making record profits and there is nothing wrong about that. We need to make the profits to shore up reserves, etc. My point was this: IJ put a “negative” spin with their headlines and “hurt”. We certainly, as an industry, as NOT being hurt– our C/R is about the highest it’s ever been! Guess I wasn’t clear about his, or you misunderstood my intent.
Companies still appear to try to outrun loss ratios with production. When profits suffer, blame the underwriters…again. Who applauds them for decent loss ratios???
“Despite the deterioration in underwriting results, the industry posted a 95.6 percent combined ratio for 2007 — the second best for any year since ISO began record keeping in 1959.”
You can jibber all you want — bottomline, the market is going to get worse before it gets better. Retail P&C, led by Liberty Mutual, Nationwide, Traveler’s, and their minions like Allied and Indiana, are flooding the market with undepriced and poorly underwritten proposals. And of course, the “regionals” fall all over themselves to keep up with the big boys, and to grab their share of market.
It’s quite simple. Every underwriter who reads this has to do two things on every risk they quote from today on: 1: Increase rates 25% and 2: Pay 15% commission. See how fast the numbers improve.
How does IJ spin the story of enormous profits into “Underwriting HurtInsurer’s Bottom Lines in 2007”. Carriers turned $61B in profits — with the LOWEST COMBINED RATIO in recent history (best was in 1959!). Who is hurting? Not me, not my clients, not the carriers. The bottom line is strong, the market remains soft, and pricing will continue soft as long as the carriers continue to make money. Seems to me NO ONE is hurting, especially the carriers. They have plenty of $$ now to put into surplus, maintain and/or incresae their “Best Rating” and weather any further storms coming along. Hurting? Baloney!
Old Pro, if you had read the article you would have seen this paragraph. “Even so, underwriting results weren’t good enough for insurers to achieve the rate of return typically earned by firms in other industries, said Murray. Fortune 500 firms, for instance, have a 13.9 percent long-term average rate of return, he said.” Companies that don’t make a decent rate of return don’t get capital. Basic economics. Poor underwriting in these cycles always kills our capital influx. I have been around long enough to see us shoot ourselves in the foot several times. We never learn, you should have.
I think you missed the point of my comment. Our industry is making record profits and there is nothing wrong about that. We need to make the profits to shore up reserves, etc. My point was this: IJ put a “negative” spin with their headlines and “hurt”. We certainly, as an industry, as NOT being hurt– our C/R is about the highest it’s ever been! Guess I wasn’t clear about his, or you misunderstood my intent.
Companies still appear to try to outrun loss ratios with production. When profits suffer, blame the underwriters…again. Who applauds them for decent loss ratios???
“Despite the deterioration in underwriting results, the industry posted a 95.6 percent combined ratio for 2007 — the second best for any year since ISO began record keeping in 1959.”
oops! I meant our C/R is about the lowest is been in recent history! NOT highest. My error.
You can jibber all you want — bottomline, the market is going to get worse before it gets better. Retail P&C, led by Liberty Mutual, Nationwide, Traveler’s, and their minions like Allied and Indiana, are flooding the market with undepriced and poorly underwritten proposals. And of course, the “regionals” fall all over themselves to keep up with the big boys, and to grab their share of market.
THOSE CHICKENS WILL COME HOME TO ROOST !
Why doesn’t TRAVELER’s just go and buy some carrier, instead of trying to buy it on the street with poor underwriting and grossly underpriced product?
Who’s next? There has to be a $2 billion to $8 billion (hint, hint) carrier ripe for acquisition?
It’s quite simple. Every underwriter who reads this has to do two things on every risk they quote from today on: 1: Increase rates 25% and 2: Pay 15% commission. See how fast the numbers improve.