Sounds more like the whining and complaining of one individual at one market.
Next time try to at least give the appearance of speaking to the overall market, rather than focusing on only your own experiences. Because there’s not much value in only one viewpoint to a problem as large as this.
It’s similar to 1999 /2000 when the market was at rock bottom and it took a combination of losses, stock market and 9/11 to swing things into a pretty brutal hard market.
Now we have non existent interest rates, a partially recovered stock market and rates through the floor with obviously claims rising as they always do in a bad economy. Most peoples’ business is down, so capacity is chasing business (madly as always).
It will go wrong, there will be a violent market correction brought about by any number of possible factors – losses, second dip in economy, terrorism, plus any other “x” factor you can think about. Then admitted markets will retreat to “core” business, packages will unbundle and all the peple who complain here about suicidal pricing will complain that even their perfect accounts can’t renew at less than a 30% – 50% rise – ignoring the 70% cut in price they have probably had over the past 5 years.
Mad – of course but it’s insurance and for all the executives try to tell the media what a great job they are doing holding the line on prices, their under stress troops in the trenches are giving it away for free every day. For all the supposed sophistication in risk modelling now in place, behaviour is just as it was in the 80’s soft marets, 90’s soft markets and so on.
Conclusion – our wonderful industry never learns and probably never will.
I have worked in most major areas of the business, including underwriting and claims, for a large P&C carrier. There is significant pressure on underwriters to make premium and retention quotas, especially in a soft market. This works OK for the underwriter as long they move into a new position before the claims pile up! One of the most flagrant abuses I recall was an underwriter trying to push through a renewal (with a 25% reduction of premium) before an under reserved loss was booked. The premium was $1M and had a full limit loss of $18M. The same account one year later had a similar loss ($20M). Lucky for the underwriter, she now works for a different division of the company. Not so good for the bottom line of the division and the company!
Based on recent experience, AIG, under any name they want to call it, will appoint any brokers and write any risk, regardless of past losses, and undercut any legitimate insurer’s quotes. They should have been allowed to fail!
I’m an insurance professional ! I want to go to Fantasy Island ! making my list of fantasies … hoping I will get my invitation soon ! If I remember right, it is just a short visit, and I won’t be able to stay, unfortunately :(
Thats Easy I sure hope you are joking. Just sell and stop whining huh? What are you selling based on? Price alone? Our industry is doing a huge disservice to our clients by presenting quotes based on a low price and not exceptional coverage. We are also helping to ensure this soft market never ends by under pricing risks to the point that no one is making any money. I agree with Alex on this one. There is a whole new generation of underwriters that have no clue as to what “underwrite” actually means.
Travelers is low balling pricing right now to gain more customers in hopes the market will turn. Listen to their earnings call. Even their own people admit they are low in price.
Welcome to the real world. Try writing new business in the Midwest. Impossible.
…because program managers are the reliable ones, always undewriting their risks… hah!
You ever try and quote against Phily? Talk about impossible I am pretty sure they dont even look at loss runs……
Sounds more like the whining and complaining of one individual at one market.
Next time try to at least give the appearance of speaking to the overall market, rather than focusing on only your own experiences. Because there’s not much value in only one viewpoint to a problem as large as this.
It’s similar to 1999 /2000 when the market was at rock bottom and it took a combination of losses, stock market and 9/11 to swing things into a pretty brutal hard market.
Now we have non existent interest rates, a partially recovered stock market and rates through the floor with obviously claims rising as they always do in a bad economy. Most peoples’ business is down, so capacity is chasing business (madly as always).
It will go wrong, there will be a violent market correction brought about by any number of possible factors – losses, second dip in economy, terrorism, plus any other “x” factor you can think about. Then admitted markets will retreat to “core” business, packages will unbundle and all the peple who complain here about suicidal pricing will complain that even their perfect accounts can’t renew at less than a 30% – 50% rise – ignoring the 70% cut in price they have probably had over the past 5 years.
Mad – of course but it’s insurance and for all the executives try to tell the media what a great job they are doing holding the line on prices, their under stress troops in the trenches are giving it away for free every day. For all the supposed sophistication in risk modelling now in place, behaviour is just as it was in the 80’s soft marets, 90’s soft markets and so on.
Conclusion – our wonderful industry never learns and probably never will.
I have worked in most major areas of the business, including underwriting and claims, for a large P&C carrier. There is significant pressure on underwriters to make premium and retention quotas, especially in a soft market. This works OK for the underwriter as long they move into a new position before the claims pile up! One of the most flagrant abuses I recall was an underwriter trying to push through a renewal (with a 25% reduction of premium) before an under reserved loss was booked. The premium was $1M and had a full limit loss of $18M. The same account one year later had a similar loss ($20M). Lucky for the underwriter, she now works for a different division of the company. Not so good for the bottom line of the division and the company!
Based on recent experience, AIG, under any name they want to call it, will appoint any brokers and write any risk, regardless of past losses, and undercut any legitimate insurer’s quotes. They should have been allowed to fail!
I’m an insurance professional ! I want to go to Fantasy Island ! making my list of fantasies … hoping I will get my invitation soon ! If I remember right, it is just a short visit, and I won’t be able to stay, unfortunately :(
Just sell. Leave the whining to the wimps.
Selling based solely on price is just lazy. But thanks for the stupid advice
What is Tattoo’s favorite kind of M&M’s?
The plain! The plain!
Thats Easy I sure hope you are joking. Just sell and stop whining huh? What are you selling based on? Price alone? Our industry is doing a huge disservice to our clients by presenting quotes based on a low price and not exceptional coverage. We are also helping to ensure this soft market never ends by under pricing risks to the point that no one is making any money. I agree with Alex on this one. There is a whole new generation of underwriters that have no clue as to what “underwrite” actually means.
Travelers is low balling pricing right now to gain more customers in hopes the market will turn. Listen to their earnings call. Even their own people admit they are low in price.
Looks like a plug for just one agency to me also, not an IJ article.