New Best Research Report: P/C Profitability Depends on Discipline

February 9, 2009

  • February 9, 2009 at 12:55 pm
    Have a Plan says:
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    Why not encourage all P&C Companies to buy a S&L and call themself a bank ..then they can all get in line for the federal bailout. That way, none of them have to ever use any underwriter discipline in order to make a profit.

  • February 9, 2009 at 1:02 am
    Derek Borisoff says:
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    And the one P&C insurer that the government bailed out is continuing to drive down the prices, all for marketshare! Using our tax dollars to the detriment of our industry.

  • February 9, 2009 at 2:09 am
    Dick Fitzwell says:
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    I’m sorry but I find this hilarious. Discipline? What discipline. I could sit here and rattle off 5 carriers right now with ZERO discipline and zero underwriting…PERIOD. I will say that Derek who posted before me was right on w/ the biggest one of all.

    These companies have NO discipline. Explain to me where the discipline lies in this example. John is paying $25,000 for his E&O policy and carries $2m limits. Certain unnamed shady carrier comes along w/ the aid of taxpayer dollars both before and even worse after, and says “hey john, how about we give you $5mm limits, cut your deductible in half and give you defense outside for 10k. What’s that? 10k isn’t good enough? Did we say 10k…..we meant 6k. If that’s not enough, my good buddy has some great golf courses I can get you on. Golf isn’t your thing? How about a trip to Vegas or maybe a posh california spa? John…why dont’ you just flat out tell me…what do i have to do to win your business (keeping in mind that from an ethical standpoint, no request is overkill)

    Give me a break. The bottom line is the current administration is handing out checks to failed institutions left and right. Guess what…it’s only enabling them to fail even more. After all…if your 16yr old crashed your new BMW and you bought them a new one the next day, do you think they’ll learn a lesson and drive slower knowing full well if they screw up, you’ll just bail them out?

    How is that any different other than the parent in this case is the treasury and the irresponsible driver is nothing more than a major insurance carrier.

  • February 9, 2009 at 2:23 am
    Ramani Ayer, Hartford CEO says:
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    In an effort to cut cost for the tax payers I have decided to layoff all actuaries who work for Hartford and replace all underwriters with computer based underwriting. I am pleased to announce that with these savings we are able to eliminate our dividend to stockholders and provide for a bonus to all executive staff. Thank you for putting your trust in the Hartford…

  • February 9, 2009 at 2:53 am
    what actuaries? says:
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    What actuaries? If half these companies actually followed actuarial data, they’d see the need for rate increases and adjust accordingly. Instead they underprice everything, then ask for a bailout when they realize they don’t have enough capital.

  • February 10, 2009 at 10:16 am
    Stat Guy says:
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    I agree: Where is discipline? Since I started in this industry there was always some carrier who was pricing below exposure just to take accounts and increase their market share. So what if the housing and banking markets tanked because of a lack undewriting standards and no discipline to write to exposure; ins’t that our capitalistic business model? It’s not buyer beware, it’s “the hell with the buyer”, no matter what the terms are for the policy, they will decline all losses anyway…. how can a company pay claims and be profitable? Or better, why should they NOT be profitable, when the business model is to take the money and run…pay claims indeed! There are those who always look for an easier, faster, softer way to do things so why shouldn’t discipline suffer? It’s too hard to do it the right way, anymore; competition is now based on unrealistic pricing instead of writing to exposure.

  • February 10, 2009 at 12:09 pm
    Tom says:
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    Hey, Dick Fitzwell, it was the LAST administration that bailed out that nameless insurance company (and we really should try to avoid revisionist history generalizations). The current administration had nothing to do with it.

  • February 11, 2009 at 10:48 am
    Dick Fitzwell says:
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    Yes the current administation has a part in this as well. Do you honestly believe AIG won’t be back for more money? What administration is going to provide it to them? It’s not GW thats for sure. I’m not putting this blame on the new administration but it doesn’t help that they are allowing battered insurance companies to buy small banking institutions just so they can access Tarp funds to heal their wounds which resulted from their own wreckless “underwriting discipline” and poor investment strategies. I hate to even use discipline in the same sentences as half these pathetic companies.



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