The interesting matter regarding the proposal is that I don’t see any comments from the insurer side of the industry seeking a new exchange.
The original exchange failed not only because of weak financing and poor oversight, but because the US market does not understand the concept of risk sharing that has been used so succesfully at Lloyds for over 300 years.
The new exchange will be a simplified way for innnocent and overly aggressive, under regulated capital to get into the market and to soften what is already too soft a marketplace.
Sounds like a terrific idea to this thirty-one year insurance veteran. It CAN work. This is the kind of idea that we need to act upon. We have learned much from our past failings. I support this one hundred percent. My son, a reinsurance executive, fully welcomes this challenge. Let us proceed with vigor.
You are exactly right about the concept of sharing risk. US Companies also fail to understand the concept of market leader. There are few outstanding underwriters who I would follow. Market leadership is now market share. The exchange also failed because it became a reinsurance club. NY caved to admitted markets and protected them from competition. Still does.
Save your vigor for other pursuits Paul. Is there a lack of commercial insurance availability? No. Is there a lack of capacity? No. Game over. I also like the “we’re not copying Lloyd’s” comment. That’s so New York.
New York has done such a steller job with SIT’s the Medical Malpracitce undewriters it will surely bring those Best Practices to this ressurection.
Where is Milos when we need him?
Lloyd’s model is not even working for them anymore… all of the large London syndicates have opened domestic US operations and London has a very limited appetite for the heavy, hairy, and hard to place risks…
I don’t see the need or the usefulness of such a marketplace.
And most wholesale brokers like myself would rather be working directly with the underwriter, rather than going through a Lloyd’s Broker.
…and not all of us live, or even want to live in NYC.
I particularly like the idea of inviting hedge fund managers and private equity firms in as players. They exhibited such sound judgement over the last decade!
Failure is not necessarily so. There is money to be made when insuring unusual, difficult or complicated risks. What one needs is capable lead underwriters and access to secure sharing and/or reinsurance. This time around we have a governmental need for the ensuing commerce and profits. Consequently there is strong support from the city.
I remember the Betty Grable’s legs AIG ad. Promoting an innovative and aggressive underwriting facility for the unique and unusual risk in the United States could turn out to be a winner for all concerned. The insurance marketplace is gradually coming off the soft phase now but the tighter phase can’t be far off and it should coincide with the early stages of economic recovery. This just might be the right time to get the Exchange off the ground.
I placed a fair amount of business in the former exchange and two major problems still exist. First is that the American Insurance industry thinks differently than London. Everyone wants to be a “LEADER” in every class and line. “Follower’ grates on our national pride. Secondly, the quality of the underwriters was second class in many cases.
If you read any other articles it’s more about the fact that Wrynn and Patterson are trying to create jobs in NY. They figure the exchange will help replace loss tax dollars from the financial crisis and will please the votes in the nothern part of the state that are struggling to find work.
The hub will be in NYC, but the back office will be albany.
These humps are thinking one thing: gaining votes and gaining tax revenues. They know nothing of soft markets and over capacity.
This pretty much sums it up — the market is soft, London is having problems competing in the US thus why so many syndicates are buying up shell carriers here and opening up shop in traditional US style vs. trying to compete from London…why would ANYONE place business in this NY syndicate?
And as to the comment of “hard to place” risks — that’s a death spiral unless you get underwriters who know what they are doing and underwrite to the losses (or potential) losses vs. just trying to compete in a soft market.
BAD BAD BAD idea!!!!! Politicians are bad businessmen — all they know is campaigning…they know little else.
I really don’t think this is a good time for this. It may create jobs, but do we really need it and with this soft market, can it make a profit for the state? I don’t think so.
What a great idea.. More capacity in a soft market!
The interesting matter regarding the proposal is that I don’t see any comments from the insurer side of the industry seeking a new exchange.
The original exchange failed not only because of weak financing and poor oversight, but because the US market does not understand the concept of risk sharing that has been used so succesfully at Lloyds for over 300 years.
The new exchange will be a simplified way for innnocent and overly aggressive, under regulated capital to get into the market and to soften what is already too soft a marketplace.
Sounds like a terrific idea to this thirty-one year insurance veteran. It CAN work. This is the kind of idea that we need to act upon. We have learned much from our past failings. I support this one hundred percent. My son, a reinsurance executive, fully welcomes this challenge. Let us proceed with vigor.
You are exactly right about the concept of sharing risk. US Companies also fail to understand the concept of market leader. There are few outstanding underwriters who I would follow. Market leadership is now market share. The exchange also failed because it became a reinsurance club. NY caved to admitted markets and protected them from competition. Still does.
Save your vigor for other pursuits Paul. Is there a lack of commercial insurance availability? No. Is there a lack of capacity? No. Game over. I also like the “we’re not copying Lloyd’s” comment. That’s so New York.
come on dad. quit bragging on me, put your pants back on and get back in the house!
New York has done such a steller job with SIT’s the Medical Malpracitce undewriters it will surely bring those Best Practices to this ressurection.
Where is Milos when we need him?
Are you the Pauls from Orange County Chopper?
Paul Jr. – I almost fell off my chair I was laughing so hard…thanks for the mid day laugh, I needed one.
Great Idea for Compitition & generate lots of returns for those participating. Hope individuals will be allowed to paticipate in the Funding.
Lloyd’s model is not even working for them anymore… all of the large London syndicates have opened domestic US operations and London has a very limited appetite for the heavy, hairy, and hard to place risks…
I don’t see the need or the usefulness of such a marketplace.
And most wholesale brokers like myself would rather be working directly with the underwriter, rather than going through a Lloyd’s Broker.
…and not all of us live, or even want to live in NYC.
I particularly like the idea of inviting hedge fund managers and private equity firms in as players. They exhibited such sound judgement over the last decade!
Failure is not necessarily so. There is money to be made when insuring unusual, difficult or complicated risks. What one needs is capable lead underwriters and access to secure sharing and/or reinsurance. This time around we have a governmental need for the ensuing commerce and profits. Consequently there is strong support from the city.
I remember the Betty Grable’s legs AIG ad. Promoting an innovative and aggressive underwriting facility for the unique and unusual risk in the United States could turn out to be a winner for all concerned. The insurance marketplace is gradually coming off the soft phase now but the tighter phase can’t be far off and it should coincide with the early stages of economic recovery. This just might be the right time to get the Exchange off the ground.
I placed a fair amount of business in the former exchange and two major problems still exist. First is that the American Insurance industry thinks differently than London. Everyone wants to be a “LEADER” in every class and line. “Follower’ grates on our national pride. Secondly, the quality of the underwriters was second class in many cases.
If you read any other articles it’s more about the fact that Wrynn and Patterson are trying to create jobs in NY. They figure the exchange will help replace loss tax dollars from the financial crisis and will please the votes in the nothern part of the state that are struggling to find work.
The hub will be in NYC, but the back office will be albany.
These humps are thinking one thing: gaining votes and gaining tax revenues. They know nothing of soft markets and over capacity.
This pretty much sums it up — the market is soft, London is having problems competing in the US thus why so many syndicates are buying up shell carriers here and opening up shop in traditional US style vs. trying to compete from London…why would ANYONE place business in this NY syndicate?
And as to the comment of “hard to place” risks — that’s a death spiral unless you get underwriters who know what they are doing and underwrite to the losses (or potential) losses vs. just trying to compete in a soft market.
BAD BAD BAD idea!!!!! Politicians are bad businessmen — all they know is campaigning…they know little else.
I really don’t think this is a good time for this. It may create jobs, but do we really need it and with this soft market, can it make a profit for the state? I don’t think so.