Hard to justify increasing rate when the company people are making money doing what they are doing, and the agents continue to scream about losing business due to pricing. It’s not hard to be the cheapest price, what is hard is being that first market to try and take a stand and realize you are going to drop market share to try and get the market righted again.
And yes…some rates are not moving. But the smart markets are going to go in on those specific classes they are losing on and increasing rate on those classes. But you know what happens? Those same brokers that complain about how soft the market is complain when those classes go up 10-15 percent.
Listen…we all want a hard market. But the market is not justifing a full on hard market. So the strong agents will survive, and those who like to point fingers and complain will fall to the wayside.
It is as aggressive as ever in the Midwest. Hanover, Indiana, and Traveler’s are buying everything they can get their hands on. Fortunately, most of what they are buying is the already competitively priced crud that Allied, Harleysville, Selective, and West Bend lost their @ss on.
What I don’t understand is why so many of these carrier profitability stories don’t mention that these same carriers are releasing their loss reserves in order to make their numbers look better. When there are no more reserves to release the carriers will have to make more money one of only two ways: better underwriting (increased rate) or investments (how can they do that with interest rates this low?). They will be forced to do this by rating agencies like AM Best or the state insurance departments. The ones who gained market share from pricing low will be out in the dark with a loser book of business generating losses with already low premiums running away for the next idiot market underpricing everyone. There will likely be several insolvencies.
Hard to justify increasing rate when the company people are making money doing what they are doing, and the agents continue to scream about losing business due to pricing. It’s not hard to be the cheapest price, what is hard is being that first market to try and take a stand and realize you are going to drop market share to try and get the market righted again.
And yes…some rates are not moving. But the smart markets are going to go in on those specific classes they are losing on and increasing rate on those classes. But you know what happens? Those same brokers that complain about how soft the market is complain when those classes go up 10-15 percent.
Listen…we all want a hard market. But the market is not justifing a full on hard market. So the strong agents will survive, and those who like to point fingers and complain will fall to the wayside.
time to lower those rates some more!
No….didn’t you hear? We will be in a HARD market next year!
Just ask those carriers who talk that crap up-they live in a dream world.
Thats right, I forgot about the hard market. Wish I had already spent the anticipated reductions
It is as aggressive as ever in the Midwest. Hanover, Indiana, and Traveler’s are buying everything they can get their hands on. Fortunately, most of what they are buying is the already competitively priced crud that Allied, Harleysville, Selective, and West Bend lost their @ss on.
What I don’t understand is why so many of these carrier profitability stories don’t mention that these same carriers are releasing their loss reserves in order to make their numbers look better. When there are no more reserves to release the carriers will have to make more money one of only two ways: better underwriting (increased rate) or investments (how can they do that with interest rates this low?). They will be forced to do this by rating agencies like AM Best or the state insurance departments. The ones who gained market share from pricing low will be out in the dark with a loser book of business generating losses with already low premiums running away for the next idiot market underpricing everyone. There will likely be several insolvencies.