MadDog, I would imagine IJ did not mention the name of the carrier since the NCCI personnel providing them information for the article did not provide the name. I’m not sure if speculation on the part of IJ would have been appropriate or responsible.
However, reaonable people would likely agree the carrier in question is Chartis.
As is normally the case, I expect to see the usual suspects jumping at the opportunity to excoriate the folks at Chartis. I’m not here to defend Chartis, but I think two things need to be put in perspective: 1) their decision to strengthen reserves and 2) the combined ratio impact.
Would it have been better for Chartis to simply not strengthen reserves? I think not. If their actuaries determined action was necessary, then the corporation should be applauded for making the finanical commitment by bolstering the reserves instead of doing nothing.
Would it not be appropriate for all those carriers comprising the $10B shortfall on reserves to make the same commitment? I daresay they are the irresponsible parties here since they are not willing to do the right thing. If the $800M hit the combined by three points, the $10B deficiency represents about 37.5 additional points on the combined ratio.
This deficiency not only represents irreponsibility on the part of the carriers involved, but it also hurts the industry. Those carriers that are covering up the deficiencies are probably screaming bloody murder about the soft market while continuing to chase business.
All they are accomplishing is a perpetuation of the soft market by artificially deflating the combined ratio and pretending to care about their bottom line and the health of their balance sheets.
This is probably an oversimplification of the situation, but needs to be considered in the analysis and debate.
So whyy did IJ tell us which carrier added more than $800 million to excess workers’ compensation reserves? My guess would be Chartis.
MadDog, I would imagine IJ did not mention the name of the carrier since the NCCI personnel providing them information for the article did not provide the name. I’m not sure if speculation on the part of IJ would have been appropriate or responsible.
However, reaonable people would likely agree the carrier in question is Chartis.
As is normally the case, I expect to see the usual suspects jumping at the opportunity to excoriate the folks at Chartis. I’m not here to defend Chartis, but I think two things need to be put in perspective: 1) their decision to strengthen reserves and 2) the combined ratio impact.
Would it have been better for Chartis to simply not strengthen reserves? I think not. If their actuaries determined action was necessary, then the corporation should be applauded for making the finanical commitment by bolstering the reserves instead of doing nothing.
Would it not be appropriate for all those carriers comprising the $10B shortfall on reserves to make the same commitment? I daresay they are the irresponsible parties here since they are not willing to do the right thing. If the $800M hit the combined by three points, the $10B deficiency represents about 37.5 additional points on the combined ratio.
This deficiency not only represents irreponsibility on the part of the carriers involved, but it also hurts the industry. Those carriers that are covering up the deficiencies are probably screaming bloody murder about the soft market while continuing to chase business.
All they are accomplishing is a perpetuation of the soft market by artificially deflating the combined ratio and pretending to care about their bottom line and the health of their balance sheets.
This is probably an oversimplification of the situation, but needs to be considered in the analysis and debate.