Loss ratio’s up so what you have the Federal goverment they can save you. I am still trying to understand how AIG can write new business, seen them twice in a week under priced two large insuance companies. The agents say, dont worry the Fed is behind them. Not sure why they are allowed to do this, unfair trade and they have no money to back the paper.
I saw some numbers also. The commercial division had a 98 combined ration and over 70 billion in assets. No problem there, it is all coming from their financial service division, ie mortgage backed securities.
Heck, even I know that if you drop premiums by 20% and everything else remains the same, it will make your combined ratio go up. It will be interesting to see the 3rd quarter results because the average combined ratio will go up due to Ike and Gustav and the companies probably will show losses because you cannot make up the difference in investing right now.
there is still to much money floating around out there to see the beginnings of a hard market. too much foreign capital from asia, the middle east and even warren buffett to see prices firm up. insurance companies never could stand prosperity!
Yeah, so? At 102 they are still making money. And their ROE dropped? They’re still making money. Net income dropped? They’re still on the plus side. Why does only declining impact follow the trickle down theory?
At 102, they’re only making money if their investment income exceeds 2%. Unless they are invested in low risk items, they probably won’t be getting 2% in the third quarter, plus there were larger losses in the third quarter with the hurricanes and other storms. Finally, when will it be revealed that other insurance companies are invested in the sub-primes?
Don’t forget about the profit factor already built into all those rates. As for hurricanes, how about reinsurance contracts with five year or longer recovery terms? Investment income is icing on the cake.
If you think even for a moment that they are making money at 102 with the mortagage crap going on you must be smoking something other than tobacco even with in a good market 102 is high!
If they look to the Feds as one poster said they will be o.k.,exec’s can take their bonus’ and screw the workers in the pit.No raise this year!
All of the companies you mentioned appear to have invested in Lehman Bros.I haven’t followed the story but have heard bits and pieces.I am extremely ticked off that the National Realtors Association and the bank appraisers seems to be getting out of any trouble for the default of many of these companies!
If that is the case the bullish market has reared it’s ugly head.Should we feel bad? Not really. Being in business and making bad business decisions is the liability of the management.(Poor)
There are many companies poised to buyout these companies if they choose to. We cannot forget re-insurance unless you have covered that portion.
The P&C part of it just has no excuse! If they are not making a profit they are not utilizing experienced employees that utilize each states laws to the fullest extent or they just have prro management that isn;t concentrating in the right areas to improve bottom line!
I am really getting to the point where I don;t care! I’ve been saying for months if not years that the way compensation is equated to CEO/CFO/COO and every other acronym you’d like to put on the people in upper management and live in the glass houses should be revamped.Martha I commend you if you turn a profit and reward your employess for their hard work and dedication.Most companies on the level that we are speaking have matrixes for mid-term and yearly reviews that make it close to if not impossible to reach anything more than a 4% pay increase to the floor workers.If you are an over achiever you normally are well compensated ONLY if you prepare a resume’ of sort’s to review with your mentor/manager so that they can add your (quote) additional duties above and beyond your job description to your yearly review!
Most of the time the reviews are revamped if management finds they have a excellent crew working under/for them so that your goals are so urealistic you would have to be a magicican to accomplish them.
I am well compensated because I am one over those over achievers and the largest pay increase I have ever seen was a bit more than double that.There are people coming in the door being paid more than I make and I am training them for a management position so if you are the way you say you are I give you a huge Congratualtions!
I’ve said it before 1/4 of the top performers will get 10% or better pay increae.1/4 will get 4% 1/4 will get 2% and 1/4 will see nothing for pay increase.
It’s a sure bet that bonus’ for the working class are a thing of the past and it’s also probably safe to say that Ike and Gustav will be the scapegoat! We all know the truth – too many CEOs comp and separation packages need to get paid first. Hopefully, rate leveling and responsible underwriting will become less of an isolated happening.
Profit factor may be built into the rates, but the combined ratio does not include the profit provision. The profit provision is built into the rates so that the companies should realize a profit.
I too think that many CEOs of big companies are over-compensated and I do hope that the government bailout package includes the pay limit on upper managements for those companies taking advantage of the bailout. But to say that bonuses (or bonus’ as you put) are a thing of the past for the working guy is not correct, in my opinion. When the economy corrects itself, and in our industry when the market hardens again, I know I will be paying bonuses for our entiring deserving staff.
Keep reading – is this who you’re putting your best business with?
EMC Insurance Group Inc. (Nasdaq: EMCI) today announced that losses associated with Hurricanes Gustav and Ike are expected to range from approximately $8.2 million to $9.0 million, or $0.39 to $.43 per share after tax.
Property and casualty insurer Harleysville Group Inc. – rated A minus by AM Best – said Tuesday that it holds $11 million worth of securities from investment bank Lehman Brothers Holdings Inc. and mega-insurer American International Group.
Shares of State Auto Financial Corp. fell sharply Monday after an analyst downgraded the insurance company’s stock, calling it overpriced after steep gains last week.
Cincinnati, which still holds securities of American International Group Inc worth about $81 million as of September 15, sees an impairment charge of about $50 million from securities related to the mortgage giants Fannie Mae and Freddie Mac.
Cincinnati said it had sold most of the $24 million of Lehman preferred stock and debt securities held at June 30, and expects to take a related charge of $9 million in third quarter.
United Fire & Casualty Co. (UFCS) projected up to $20 million in third-quarter pretax losses from hurricanes Gustav and Ike and added a default by Lehman Brothers Holdings Inc. (LEHMQ) would cut earnings by another $4 million.
Standard & Poor’s Ratings Services it has lowered its outlook on Selective Insurance Group Inc. and its subsidiaries to negative from stable, citing concerns that recent profitability has not been as strong as the ratings agency expected at the current rating level, as well as the decline in capital adequacy since the end of 2006 and relative to peers.
Jerry, these are just the stock companies – those that have to report to the public. Imagine the mutuals, who I have heard are getting ready to post combined ratios in the 105 to 106 range. (two regionals in Wisconsin, and another in Michigan, specifically)
Here you go, but yet the market is soft as Heck here in Minnesota. It is crazy!
Keep reading – is this who you’re putting your best business with?
EMC Insurance Group Inc. (Nasdaq: EMCI) today announced that losses associated with Hurricanes Gustav and Ike are expected to range from approximately $8.2 million to $9.0 million, or $0.39 to $.43 per share after tax.
Property and casualty insurer Harleysville Group Inc. – rated A minus by AM Best – said Tuesday that it holds $11 million worth of securities from investment bank Lehman Brothers Holdings Inc. and mega-insurer American International Group.
Shares of State Auto Financial Corp. fell sharply Monday after an analyst downgraded the insurance company’s stock, calling it overpriced after steep gains last week.
Cincinnati, which still holds securities of American International Group Inc worth about $81 million as of September 15, sees an impairment charge of about $50 million from securities related to the mortgage giants Fannie Mae and Freddie Mac.
Cincinnati said it had sold most of the $24 million of Lehman preferred stock and debt securities held at June 30, and expects to take a related charge of $9 million in third quarter.
United Fire & Casualty Co. (UFCS) projected up to $20 million in third-quarter pretax losses from hurricanes Gustav and Ike and added a default by Lehman Brothers Holdings Inc. (LEHMQ) would cut earnings by another $4 million.
Standard & Poor’s Ratings Services it has lowered its outlook on Selective Insurance Group Inc. and its subsidiaries to negative from stable, citing concerns that recent profitability has not been as strong as the ratings agency expected at the current rating level, as well as the decline in capital adequacy since the end of 2006 and relative to peers.
Sounds like the beginning of the end of the soft market to me! Most carriers are reporting earnings less than last year, and the 3rd quarter has got to be a bust.
Fitch Ratings has downgraded the long-term Issuer Default Ratings (IDRs) and Insurer Financial Strength (IFS) ratings of Liberty Mutual Group, Inc. (LMG) and Safeco Corp. The Rating Outlook is Negative.
I think Liberty will be quiet for awhile, while they try to sort out this mess.
Storm Losses. Reduced income from investments. And what about the economy, and how it impacts premium, exposures, cancellations due to bankruptcy, etc.? And how are these companies doing with all of the construction business? In our agency we are seeing expiring premiums reduced by 15-20% on GL and work Comp. And guess what, this hits us on the revenue side. Premium that we thought we had, we don’t. So how does this hurt the companies right now that are heavy in construction?
Jerry – I heard that one of those Wisconsin companies is West Bend. they had a combined of 102 last year, and they are likely headed for 105 or 106 this year. Remember about 10 years ago when they got into so much trouble that they started non-renewing ALL business for about 2 or 3 months? They have a BIG new building to pay for. A 105 combined and low return on investments doesn’t make for a good combination.
I say halleluiah. Maybe the market will harden somewhat.
Loss ratio’s up so what you have the Federal goverment they can save you. I am still trying to understand how AIG can write new business, seen them twice in a week under priced two large insuance companies. The agents say, dont worry the Fed is behind them. Not sure why they are allowed to do this, unfair trade and they have no money to back the paper.
Tom,
I saw some numbers also. The commercial division had a 98 combined ration and over 70 billion in assets. No problem there, it is all coming from their financial service division, ie mortgage backed securities.
Heck, even I know that if you drop premiums by 20% and everything else remains the same, it will make your combined ratio go up. It will be interesting to see the 3rd quarter results because the average combined ratio will go up due to Ike and Gustav and the companies probably will show losses because you cannot make up the difference in investing right now.
Rates have gotten way too low, perhaps now they will go up…
there is still to much money floating around out there to see the beginnings of a hard market. too much foreign capital from asia, the middle east and even warren buffett to see prices firm up. insurance companies never could stand prosperity!
Yeah, so? At 102 they are still making money. And their ROE dropped? They’re still making money. Net income dropped? They’re still on the plus side. Why does only declining impact follow the trickle down theory?
And hey, if things get too bad, we can always bail them out.
At 102, they’re only making money if their investment income exceeds 2%. Unless they are invested in low risk items, they probably won’t be getting 2% in the third quarter, plus there were larger losses in the third quarter with the hurricanes and other storms. Finally, when will it be revealed that other insurance companies are invested in the sub-primes?
Don’t forget about the profit factor already built into all those rates. As for hurricanes, how about reinsurance contracts with five year or longer recovery terms? Investment income is icing on the cake.
If you think even for a moment that they are making money at 102 with the mortagage crap going on you must be smoking something other than tobacco even with in a good market 102 is high!
If they look to the Feds as one poster said they will be o.k.,exec’s can take their bonus’ and screw the workers in the pit.No raise this year!
Bullish market Bill! Martha please excuse my spelling.I’m all thumbs at typing.
All of the companies you mentioned appear to have invested in Lehman Bros.I haven’t followed the story but have heard bits and pieces.I am extremely ticked off that the National Realtors Association and the bank appraisers seems to be getting out of any trouble for the default of many of these companies!
If that is the case the bullish market has reared it’s ugly head.Should we feel bad? Not really. Being in business and making bad business decisions is the liability of the management.(Poor)
There are many companies poised to buyout these companies if they choose to. We cannot forget re-insurance unless you have covered that portion.
The P&C part of it just has no excuse! If they are not making a profit they are not utilizing experienced employees that utilize each states laws to the fullest extent or they just have prro management that isn;t concentrating in the right areas to improve bottom line!
I am really getting to the point where I don;t care! I’ve been saying for months if not years that the way compensation is equated to CEO/CFO/COO and every other acronym you’d like to put on the people in upper management and live in the glass houses should be revamped.Martha I commend you if you turn a profit and reward your employess for their hard work and dedication.Most companies on the level that we are speaking have matrixes for mid-term and yearly reviews that make it close to if not impossible to reach anything more than a 4% pay increase to the floor workers.If you are an over achiever you normally are well compensated ONLY if you prepare a resume’ of sort’s to review with your mentor/manager so that they can add your (quote) additional duties above and beyond your job description to your yearly review!
Most of the time the reviews are revamped if management finds they have a excellent crew working under/for them so that your goals are so urealistic you would have to be a magicican to accomplish them.
I am well compensated because I am one over those over achievers and the largest pay increase I have ever seen was a bit more than double that.There are people coming in the door being paid more than I make and I am training them for a management position so if you are the way you say you are I give you a huge Congratualtions!
I’ve said it before 1/4 of the top performers will get 10% or better pay increae.1/4 will get 4% 1/4 will get 2% and 1/4 will see nothing for pay increase.
It’s a sure bet that bonus’ for the working class are a thing of the past and it’s also probably safe to say that Ike and Gustav will be the scapegoat! We all know the truth – too many CEOs comp and separation packages need to get paid first. Hopefully, rate leveling and responsible underwriting will become less of an isolated happening.
Profit factor may be built into the rates, but the combined ratio does not include the profit provision. The profit provision is built into the rates so that the companies should realize a profit.
I too think that many CEOs of big companies are over-compensated and I do hope that the government bailout package includes the pay limit on upper managements for those companies taking advantage of the bailout. But to say that bonuses (or bonus’ as you put) are a thing of the past for the working guy is not correct, in my opinion. When the economy corrects itself, and in our industry when the market hardens again, I know I will be paying bonuses for our entiring deserving staff.
Keep reading – is this who you’re putting your best business with?
EMC Insurance Group Inc. (Nasdaq: EMCI) today announced that losses associated with Hurricanes Gustav and Ike are expected to range from approximately $8.2 million to $9.0 million, or $0.39 to $.43 per share after tax.
Property and casualty insurer Harleysville Group Inc. – rated A minus by AM Best – said Tuesday that it holds $11 million worth of securities from investment bank Lehman Brothers Holdings Inc. and mega-insurer American International Group.
Shares of State Auto Financial Corp. fell sharply Monday after an analyst downgraded the insurance company’s stock, calling it overpriced after steep gains last week.
Cincinnati, which still holds securities of American International Group Inc worth about $81 million as of September 15, sees an impairment charge of about $50 million from securities related to the mortgage giants Fannie Mae and Freddie Mac.
Cincinnati said it had sold most of the $24 million of Lehman preferred stock and debt securities held at June 30, and expects to take a related charge of $9 million in third quarter.
United Fire & Casualty Co. (UFCS) projected up to $20 million in third-quarter pretax losses from hurricanes Gustav and Ike and added a default by Lehman Brothers Holdings Inc. (LEHMQ) would cut earnings by another $4 million.
Standard & Poor’s Ratings Services it has lowered its outlook on Selective Insurance Group Inc. and its subsidiaries to negative from stable, citing concerns that recent profitability has not been as strong as the ratings agency expected at the current rating level, as well as the decline in capital adequacy since the end of 2006 and relative to peers.
Jerry, these are just the stock companies – those that have to report to the public. Imagine the mutuals, who I have heard are getting ready to post combined ratios in the 105 to 106 range. (two regionals in Wisconsin, and another in Michigan, specifically)
Here you go, but yet the market is soft as Heck here in Minnesota. It is crazy!
Keep reading – is this who you’re putting your best business with?
EMC Insurance Group Inc. (Nasdaq: EMCI) today announced that losses associated with Hurricanes Gustav and Ike are expected to range from approximately $8.2 million to $9.0 million, or $0.39 to $.43 per share after tax.
Property and casualty insurer Harleysville Group Inc. – rated A minus by AM Best – said Tuesday that it holds $11 million worth of securities from investment bank Lehman Brothers Holdings Inc. and mega-insurer American International Group.
Shares of State Auto Financial Corp. fell sharply Monday after an analyst downgraded the insurance company’s stock, calling it overpriced after steep gains last week.
Cincinnati, which still holds securities of American International Group Inc worth about $81 million as of September 15, sees an impairment charge of about $50 million from securities related to the mortgage giants Fannie Mae and Freddie Mac.
Cincinnati said it had sold most of the $24 million of Lehman preferred stock and debt securities held at June 30, and expects to take a related charge of $9 million in third quarter.
United Fire & Casualty Co. (UFCS) projected up to $20 million in third-quarter pretax losses from hurricanes Gustav and Ike and added a default by Lehman Brothers Holdings Inc. (LEHMQ) would cut earnings by another $4 million.
Standard & Poor’s Ratings Services it has lowered its outlook on Selective Insurance Group Inc. and its subsidiaries to negative from stable, citing concerns that recent profitability has not been as strong as the ratings agency expected at the current rating level, as well as the decline in capital adequacy since the end of 2006 and relative to peers.
Sounds like the beginning of the end of the soft market to me! Most carriers are reporting earnings less than last year, and the 3rd quarter has got to be a bust.
Fitch Ratings has downgraded the long-term Issuer Default Ratings (IDRs) and Insurer Financial Strength (IFS) ratings of Liberty Mutual Group, Inc. (LMG) and Safeco Corp. The Rating Outlook is Negative.
I think Liberty will be quiet for awhile, while they try to sort out this mess.
Storm Losses. Reduced income from investments. And what about the economy, and how it impacts premium, exposures, cancellations due to bankruptcy, etc.? And how are these companies doing with all of the construction business? In our agency we are seeing expiring premiums reduced by 15-20% on GL and work Comp. And guess what, this hits us on the revenue side. Premium that we thought we had, we don’t. So how does this hurt the companies right now that are heavy in construction?
Jerry – I heard that one of those Wisconsin companies is West Bend. they had a combined of 102 last year, and they are likely headed for 105 or 106 this year. Remember about 10 years ago when they got into so much trouble that they started non-renewing ALL business for about 2 or 3 months? They have a BIG new building to pay for. A 105 combined and low return on investments doesn’t make for a good combination.