Verisk’s ISO Personal Lines Program Targets $40 Billion Private Flood Insurance Market

January 11, 2018

  • January 12, 2018 at 6:53 am
    Tax Cuts 4 PolaRich Bears says:
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    Hooray, Verisk! I can see the cracks in the wall that is holding back the private insurance market from writing most if not all NFIP business… and more. Verisk must have seen in some market data that the demand for more comprehensive flood insurance is strong. Otherwise, it wouldn’t expend the effort to develop this new form(s).

    The expanded coverage terms imply that freedom of choice in the flood insurance market is as important as it is in health insurance, and that both of those lines’ social insurance programs are failing to provide the choices sought by consumers, at affordable rates.

    Hooray for capitalism! It will soon AGAIN prove to be much better for people and polar bears than monarchies, dictatorships, socialism, and communism. {muffled sound of paws banging together in a vain attempt to applaud Verisk}

  • January 12, 2018 at 7:05 am
    Tax Cuts 4 PolaRich Bears says:
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    Three things to stress in regard to this new product’s viability;

    1. Acceptance levels of the commercial lines product rolled out last year (2017).
    2. Congressional reforms to the NFIP and related matters, advanced by Hensearling.
    3. Availability of ‘big data’ for actuaries at Verisk to model the peril much better than before.

    The actuarially adequate rates developed by Verisk may be a temporary hurdle to clear. But it is pivotal because it will force property owners and municipalities to consider mitigation of the flood risk, or evacuation from flood zones over two or more current / future generations.

    • January 12, 2018 at 10:42 am
      Agent says:
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      Polar, in view of Harvey loss example, who will provide the re-insurance? Huge losses may bankrupt some companies getting into this market unless there is some serious back up.

      • January 12, 2018 at 10:56 am
        Tax Cuts 4 PolaRich Bears says:
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        New entrants into Property Cat XS reinsurance markets are unlikely to get or take large shares of those excess layers. New entrants into primary property markets will not take big shares of markets as long as their management is competent and exercise good judgment regarding exposure accumulation by geo area and lines of business with high correlation of loss activity.

        Who will provide reinsurance going forward? The same players in the traditional reinsurance market as did in the past, save for some which may have been hit too hard, AND the current and expanded ILS / Cat Bond markets (i.e. financial institutions administering the Cat bonds).

        I haven’t follow the hits to reinsurers impacted by the 2017 Nat Cats, but suspect the smaller one(s) may be experiencing problems in their balance sheet, if not in their wording of their soon due quarterly and annual reports. Perhaps they should hire some ‘recently discarded’ (fired) fake news media members to help word the answers to interrogatories in their annual statement and other financial docs?

        • January 12, 2018 at 12:54 pm
          Agent says:
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          Polar, I see some strange things going on with the private markets. AmTrust has been pumping money, selling assets into their coffers from the family that owns them. Now, they say they are anticipating going private? Guess they don’t like getting complaints from shareholders over their poor Combined Loss Ratio which was 134% in third quarter of 2017. Oh, but they are stronger than ever according to the statement they put out.

          • January 16, 2018 at 6:54 am
            Tax Cuts 4 PolaRich Bears says:
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            I haven’t seen their loss ratio broken down into cat and non-cat parts.
            If the cat part is large, they just hit a bump in the road. If the non-cat part is ‘large’, there may be trouble ahead. That is only speculation, but partially supported by them now considering going private – – – to avoid stockholder scrutiny / criticism. Also consider a sizeable cat loss ratio coupled with a ‘large’ non-cat loss ratio, the latter possibly due to reserve increases on old years.

            There are other possibilities, but speculation isn’t my priority on this medium size player. Wait for their annual reports, due in a few weeks. What will yield insight into these situations is the detail of gross basis loss ratios and net basis loss ratios. How well were their property cat XS reinsurance treaties designed as measured per the results?



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