it will be priced low for the remainder of the year. If you have paid attention to any of the rating companies, not S&P, but MarketScout or Advisen, you will have read that rates are starting to harden and by the end of the year they will be increasing. At which point AIG will likely GUT the insureds and take 10-15% rate hikes.
If you also look at the report released by PCI and Business Insurance, the industry sustained a $2.5B net underwriting loss in Q1, and a $1.3B loss overall. The worst in 20 years. Numbers like that will aid in turning the tide as we all head towards the 3rd and 4th quarter.
Regarding the reputation of AIG, even as a competitor, I still think the company’s insurance operations have a decent reputation. Again, people need to remember that the insurance operations didn’t cause this – as we have seen time and time again the insurance operations are very solvent. In case you forgot the Holding Company tried to raid Insurance Company’s for $20B Surplus last September before the NY Attorney General blocked it.
At the rate of business they are buying, they should be able to pay back the taypayer dollars very quickly. It is the insureds that should worry once the losses start rolling in. Had a risk with $1.5MM in losses last year. AIG wrote for 40% under expiring.
Yes, they should pay it back quickly. AIG made a 30% upfront profit due to their overestimation of assets and the Federal Government’s gullibility by not questioning AIG’s asset figures. It is no wonder they can buy business.
I wonder where the “payback” money from AIG will wind up? Will it actually be used to fund some of Obama’s proposed projects to help the country, thereby saving taxpayers from having to foot the entire bill? Or will it wind up yet again in some bureaucrat’s pocket? All together now, “Same old story, same old song & dance, my friend…”
That doesn’t surprise me in the least. I find it hard to believe that some of the insurance divisions are aware of what their MGA’s are up to. If they are aware of it, then the whole company deserves to go up in flames for total impcompetent leadership.
the MGA’s realize they’re sitting ducks. they need to price business ridiculously low because the company they’re using has such a “good” reputation… last year(or years) that will work…
Would somebody please tell Liberty Mutual and all of her kids that the hard market is coming and they need to play nice? Almost every rating agency has blasted them or given them NEGATIVE ratings, and yet they continue to be one of the Big Three (I suspect) that continues to drive the lack of underwriting or pricing discipline in the market. If we could get Lib Mutual, AIG, and Hartford to be smart, then this thing could turn. But 2 of the 3 are backed by the government, and the other one doesn’t have to open their books to anybody.
The big 3 were publicly traded companies. Liberty is not. I’m sure you recently got burned on a renewal or new business. One or two cirucumstances doesn’t prove one company is still buying business. I’m still seeing it from A LOT of carriers.
The hard markets are caused by idiots underpricing business to gain marketshare. They drive rates below sustainability and the industry follows in an attempt to stay competitive. Eventually everyone sees the errors of their ways and the hard market returns. Idiots again lead the way in posting over-zealous rate increases that annoy our customers.
If the industry could find a little balance that would stabalize the valleys and troughes of the cycle it would benefit both insurers and our reputation.
Thats what great about capitalism…you can be as foolish as you want…there is no definitive answer here…one mans under/over price is another mans opportunity…get used to it!
it will be priced low for the remainder of the year. If you have paid attention to any of the rating companies, not S&P, but MarketScout or Advisen, you will have read that rates are starting to harden and by the end of the year they will be increasing. At which point AIG will likely GUT the insureds and take 10-15% rate hikes.
If you also look at the report released by PCI and Business Insurance, the industry sustained a $2.5B net underwriting loss in Q1, and a $1.3B loss overall. The worst in 20 years. Numbers like that will aid in turning the tide as we all head towards the 3rd and 4th quarter.
Regarding the reputation of AIG, even as a competitor, I still think the company’s insurance operations have a decent reputation. Again, people need to remember that the insurance operations didn’t cause this – as we have seen time and time again the insurance operations are very solvent. In case you forgot the Holding Company tried to raid Insurance Company’s for $20B Surplus last September before the NY Attorney General blocked it.
At the rate of business they are buying, they should be able to pay back the taypayer dollars very quickly. It is the insureds that should worry once the losses start rolling in. Had a risk with $1.5MM in losses last year. AIG wrote for 40% under expiring.
Yes, they should pay it back quickly. AIG made a 30% upfront profit due to their overestimation of assets and the Federal Government’s gullibility by not questioning AIG’s asset figures. It is no wonder they can buy business.
I wonder where the “payback” money from AIG will wind up? Will it actually be used to fund some of Obama’s proposed projects to help the country, thereby saving taxpayers from having to foot the entire bill? Or will it wind up yet again in some bureaucrat’s pocket? All together now, “Same old story, same old song & dance, my friend…”
That doesn’t surprise me in the least. I find it hard to believe that some of the insurance divisions are aware of what their MGA’s are up to. If they are aware of it, then the whole company deserves to go up in flames for total impcompetent leadership.
Yes, and there’s also an “excellent chance” that I will flap my arms and fly to the moon-just pay $1 billion and I’ll do it for you.
the MGA’s realize they’re sitting ducks. they need to price business ridiculously low because the company they’re using has such a “good” reputation… last year(or years) that will work…
Would somebody please tell Liberty Mutual and all of her kids that the hard market is coming and they need to play nice? Almost every rating agency has blasted them or given them NEGATIVE ratings, and yet they continue to be one of the Big Three (I suspect) that continues to drive the lack of underwriting or pricing discipline in the market. If we could get Lib Mutual, AIG, and Hartford to be smart, then this thing could turn. But 2 of the 3 are backed by the government, and the other one doesn’t have to open their books to anybody.
The big 3 were publicly traded companies. Liberty is not. I’m sure you recently got burned on a renewal or new business. One or two cirucumstances doesn’t prove one company is still buying business. I’m still seeing it from A LOT of carriers.
What is wrong with Liberty? I love their products and rates. Very competitive.
Dally Po and Former Status Quo.
Quit crying about AIG. If you can’t compete with them, get out of the business. Underwrite the best of class and price the accounts accordingly.
I am getting tired of your type wishing us into a hard market (If we could get Lib Mutual, AIG, and Hartford to be smart, then this thing could turn).
Drastic turns to Hard Markets give our industry a black eye. Insurance companies just barely rate above used car dealers in the publics eye.
Jimmy,
The hard markets are caused by idiots underpricing business to gain marketshare. They drive rates below sustainability and the industry follows in an attempt to stay competitive. Eventually everyone sees the errors of their ways and the hard market returns. Idiots again lead the way in posting over-zealous rate increases that annoy our customers.
If the industry could find a little balance that would stabalize the valleys and troughes of the cycle it would benefit both insurers and our reputation.
Thats what great about capitalism…you can be as foolish as you want…there is no definitive answer here…one mans under/over price is another mans opportunity…get used to it!