His stupid company GEICO goes crazy blasting dumb ads of people hopefully saving money by using non agents is a ridiculous business model.
The recession is driving price but in reality will bite them so hard when they spend more advertising money than any other company and lose in the end.
Mr. Buffett is obviously correct in his opinion of the Life insurance industry – that they took crazy risks designing and marketing new “life” and indexed annuity products with unrealistic guarantees. Mr. Buffett still has the credibility to warn, if he will, the Federal government from pushing the Property/Casualty industry down the same path of “yield first, protection and security second (or never).
Life companies sealed their fate when they started replacing their top management with investment gurus to chase skyhigh stock market yields of the 90s. The Life industry was cash rich because very conservative investment strategies that were put in place to protect CONSUMERS – not to enrich speculators! The rush after high yield at the expense of financial risk management was initially resisted by old-line CEO and Board Members, who were unceremoniously replaced by “smart” Wall Street gurus who knew how to get the high yields, via high-risk investments. Once in charge, they dismantled conservative investment stategies, dooming many Life companies to their fate. Property/Casualty is now threatened with oversight by the same Senators and Congressmen who encouraged the dismantling of conservative investment protections in the Life and Financial services industry. If this happens, there won’t be a Home, Auto or Business insurer around to beat up on when we have another Katrina or 9/11 event. I hope someone is listening to Mr. Buffett; hopefully the Property/Casualty industry won’t be the next casualty.
I agree with both Bill and Had Enough. The changes in management Bill mentions are very real and we’ve seen the same greedy, “high rolling” Wall Street mentality in today’s management of the P&C companies – so much so that they tend to forget where the money comes from – the “lowly” policyholder whiosde claims they will seeik every avenue to deny.
And, Had Enough hit the GEICO nail right on the head. Their business is to push policies, not coverage, to make their money and not serve their clientele effectively. By pushing price, they make no effort to educate the consumer that his or her entire future might hinge on having the proper insurance, rather treating the insurance contract as a “disposable” commodity to be puchased at the cheapest price. I have seen them quote less coverage than a prospect had so they could live up to their advertisement of saving them 15% in 15 minutes. Insurance is too critical to fool around with like this.
His stupid company GEICO goes crazy blasting dumb ads of people hopefully saving money by using non agents is a ridiculous business model.
The recession is driving price but in reality will bite them so hard when they spend more advertising money than any other company and lose in the end.
Mr. Buffett is obviously correct in his opinion of the Life insurance industry – that they took crazy risks designing and marketing new “life” and indexed annuity products with unrealistic guarantees. Mr. Buffett still has the credibility to warn, if he will, the Federal government from pushing the Property/Casualty industry down the same path of “yield first, protection and security second (or never).
Life companies sealed their fate when they started replacing their top management with investment gurus to chase skyhigh stock market yields of the 90s. The Life industry was cash rich because very conservative investment strategies that were put in place to protect CONSUMERS – not to enrich speculators! The rush after high yield at the expense of financial risk management was initially resisted by old-line CEO and Board Members, who were unceremoniously replaced by “smart” Wall Street gurus who knew how to get the high yields, via high-risk investments. Once in charge, they dismantled conservative investment stategies, dooming many Life companies to their fate. Property/Casualty is now threatened with oversight by the same Senators and Congressmen who encouraged the dismantling of conservative investment protections in the Life and Financial services industry. If this happens, there won’t be a Home, Auto or Business insurer around to beat up on when we have another Katrina or 9/11 event. I hope someone is listening to Mr. Buffett; hopefully the Property/Casualty industry won’t be the next casualty.
I agree with both Bill and Had Enough. The changes in management Bill mentions are very real and we’ve seen the same greedy, “high rolling” Wall Street mentality in today’s management of the P&C companies – so much so that they tend to forget where the money comes from – the “lowly” policyholder whiosde claims they will seeik every avenue to deny.
And, Had Enough hit the GEICO nail right on the head. Their business is to push policies, not coverage, to make their money and not serve their clientele effectively. By pushing price, they make no effort to educate the consumer that his or her entire future might hinge on having the proper insurance, rather treating the insurance contract as a “disposable” commodity to be puchased at the cheapest price. I have seen them quote less coverage than a prospect had so they could live up to their advertisement of saving them 15% in 15 minutes. Insurance is too critical to fool around with like this.