February 1, 2012
By FELICITY BARRINGER
EXCERPTS:
Insurance commissioners in California, New York and Washington State will require that companies disclose how they intend to respond to the risks their businesses and customers face from increasingly severe storms and wildfires, rising sea levels and other consequences of climate change, California’s commissioner said Wednesday.
“Our goal is to have the most complete, best and accurate information possible for investors, the insurance industry, regulators and the broader public.”
Last year’s level of natural disasters was unprecedented, according to an August report by the A. M. Best Company, which rates the financial strength of insurers. By late June, the estimated $27 billion in losses suffered by the American industry exceeded the 2010 total.
The disclosure survey will be mandatory for companies writing policies worth more than $300 million nationwide. It was created by Ceres, a Boston-based nonprofit group that leads a coalition of investors and environmental groups in gathering information about business responses to climate change, and prods them to do more.
Robert Hartwig, president and economist at the Insurance Information Institute, an industry trade group,.... He added, “If insurers have shown anything over the course of the centuries in which they have oared it is that they are capable of managing changes in the weather on both the micro and the macro scale.”
Roughly 25 percent of the industry’s large property, casualty and life insurance companies participated in an earlier version of the survey sent out by California and five other states last year. A rule change, combined with California’s partnership with New York and Washington, will mean that 300 of the larger insurers will have to comply. Companies that do not complete the survey could face fines, although it is highly unusual for companies to ignore such directives.
The survey’s contents, Mr. Logan said, “are pretty basic. What the regulators are trying to get a sense of is whether companies have thought about the cost implications for their businesses.”
He added: “The big takeaway from the survey last year is that there is a high level of concern among insurers about the impacts of climate change that is not matched by concrete plans to deal with those impacts. There is a real gap between the risk that’s been identified and plans to address it.” Eleven of the 88 companies surveyed last year, he said, reported having formal policies to manage climate change.
Another group that might benefit from such disclosures, said California’s insurance commissioner, Mr. Jones, are investors in the insurance industry.
“If we feel insurance or energy companies are not incorporating climate risk into their analyses and their boards of directors are not recognizing it,” he said, “that failure to do so endangers the value of that investment.” The result, he said, would not be disinvestment but “engagement with those companies,” because “they are not caretaking their business very well.”
Access Article: http://www.nytimes.com/2012/02/02/business/energy-environment/three-states-tell-insurers-to-disclose-responses-to-climate-change.html?_r=1
Showing posts with label P and C. Show all posts
Showing posts with label P and C. Show all posts
Thursday, February 2, 2012
Friday, January 13, 2012
Insurance CIOs Vary in Value Proposition Views
What they need, how they get it and how they deliver varies widely, notes Novarica.
Insurance Networking News, January 12, 2012
Pat Speer
Insurance CIOs view many of their contributions to the organizations they serve as one of supporting new strategic initiatives, while the most important factor in CIOs’ ability to deliver on this value proposition is their relationship with business leaders. Such are the results of a new report, “Creating Enterprise Value as CIO,” issued today by New York-based research and consulting firm Novarica. The report targeted 111 members of its more than 300-member Novarica Insurance Technology Research Council, a moderated membership group of senior insurance IT executives from both the property/casualty and life/annuity sectors.
Of the 111 who took Novarica’s online survey during December 2010, approximately 33 percent represented large (more than $1 billion in premiums) companies, while 50 percent represented midsize carriers (between $100 million and $1 billion in premiums). Small carriers (less than $100 million in premium) comprised 17 percent of the total.
Approximately one-half (45 percent) of respondents across organizations of all sizes noted supporting new strategic initiatives as the CIOs’ most meaningful contribution.
“These CIOs are being judged (or are judging themselves) not by how much they can save, but by how much more than can help the company achieve,” says Matthew Josefowicz, partner in the insurance practice at Novarica and author of the report.
Approximately one-third noted that their impact on the organization was most obvious in creating efficiency and effectiveness (cutting operational costs), which, according to the report, means that these CIOs are functioning in a traditional role of helping their companies perform better and more cheaply.
Just more than a fifth of respondents reported seeing their value primarily in terms of driving innovation (operations, products/services). CIOs from mid- to small-sized carriers were more likely to choose “driving innovation in products/services” as a contributing factor to creating value. And an average of only two percent of respondents noted “identifying growth opportunities” as a primary source of creating value for their organizations.
“These CIOs have transitioned from being primarily oriented toward execution to focusing more on effecting change for their companies,” says Josefowicz.
Perhaps most noteworthy is the difference between those who cited their primary value as innovating in either product or process and the total group of CIO respondents was in their self perception. Those “innovators” are more likely to ascribe their ability to deliver innovation to their technology knowledge/skills and project/team management rather than their ability to align with the business side.
Josefowicz admits that the sample size is small, but says “it’s interesting that the innovators are not necessarily those who ‘play well with others’ – they are slightly more likely to be those with a high level of confidence in their own knowledge and ability to deliver.”
More than 40 percent of insurer CIOs think their business leaders have a poor understanding of enterprise IT issues, but only 24 percent see that as a problem. Further, only 11 percent rated their business leaders’ knowledge as “high” yet more than half said that business leaders’ knowledge served to help them obtain resources.
“So, according to our group, even a decent understanding of enterprise systems on the part of business leaders can be beneficial in securing resources,” notes Josefowicz.
Finally, while CIOs are most likely to look to their own IT staffs and other insurer’s IT staffs for future leaders, the innovators are much more likely than others to consider cross-pollinating with the business organization, according to the report.
For more information on related topics, visit the following channels:
Access Source And Its Great Content: http://www.insurancenetworking.com/news/novarica-cio-proposition-values-29718-1.html
Insurance Networking News, January 12, 2012
Pat Speer
Insurance CIOs view many of their contributions to the organizations they serve as one of supporting new strategic initiatives, while the most important factor in CIOs’ ability to deliver on this value proposition is their relationship with business leaders. Such are the results of a new report, “Creating Enterprise Value as CIO,” issued today by New York-based research and consulting firm Novarica. The report targeted 111 members of its more than 300-member Novarica Insurance Technology Research Council, a moderated membership group of senior insurance IT executives from both the property/casualty and life/annuity sectors.
Of the 111 who took Novarica’s online survey during December 2010, approximately 33 percent represented large (more than $1 billion in premiums) companies, while 50 percent represented midsize carriers (between $100 million and $1 billion in premiums). Small carriers (less than $100 million in premium) comprised 17 percent of the total.
Approximately one-half (45 percent) of respondents across organizations of all sizes noted supporting new strategic initiatives as the CIOs’ most meaningful contribution.
“These CIOs are being judged (or are judging themselves) not by how much they can save, but by how much more than can help the company achieve,” says Matthew Josefowicz, partner in the insurance practice at Novarica and author of the report.
Approximately one-third noted that their impact on the organization was most obvious in creating efficiency and effectiveness (cutting operational costs), which, according to the report, means that these CIOs are functioning in a traditional role of helping their companies perform better and more cheaply.
Just more than a fifth of respondents reported seeing their value primarily in terms of driving innovation (operations, products/services). CIOs from mid- to small-sized carriers were more likely to choose “driving innovation in products/services” as a contributing factor to creating value. And an average of only two percent of respondents noted “identifying growth opportunities” as a primary source of creating value for their organizations.
“These CIOs have transitioned from being primarily oriented toward execution to focusing more on effecting change for their companies,” says Josefowicz.
Perhaps most noteworthy is the difference between those who cited their primary value as innovating in either product or process and the total group of CIO respondents was in their self perception. Those “innovators” are more likely to ascribe their ability to deliver innovation to their technology knowledge/skills and project/team management rather than their ability to align with the business side.
Josefowicz admits that the sample size is small, but says “it’s interesting that the innovators are not necessarily those who ‘play well with others’ – they are slightly more likely to be those with a high level of confidence in their own knowledge and ability to deliver.”
More than 40 percent of insurer CIOs think their business leaders have a poor understanding of enterprise IT issues, but only 24 percent see that as a problem. Further, only 11 percent rated their business leaders’ knowledge as “high” yet more than half said that business leaders’ knowledge served to help them obtain resources.
“So, according to our group, even a decent understanding of enterprise systems on the part of business leaders can be beneficial in securing resources,” notes Josefowicz.
Finally, while CIOs are most likely to look to their own IT staffs and other insurer’s IT staffs for future leaders, the innovators are much more likely than others to consider cross-pollinating with the business organization, according to the report.
For more information on related topics, visit the following channels:
Access Source And Its Great Content: http://www.insurancenetworking.com/news/novarica-cio-proposition-values-29718-1.html
Thursday, January 12, 2012
National Study Reveals Customer Satisfaction Ratings for Insurers - Insurance News Net
Foster City, CA (PRWEB) January 11, 2012
A new national study of satisfaction ratings conducted by Insure.com provides a comprehensive view of how consumers feel about the largest auto, home, health and life insurance companies in the U.S.
In addition to the survey results, Insure.com has released a Best Insurance Companies tool which allows consumers to see how their insurer measures up against the competition when it comes to customer satisfaction. The tool breaks out five measurements of satisfaction:
Insure.com also awarded its “People’s Choice Award” to the three highest-scoring insurers in each line of business included in its study.
Best car insurance companies
Best life insurance companies
The rankings
Rank – Insurance Company – Overall Score out of 100
Auto insurance companies
1. USAA* 98.00
2. Auto-Owners Insurance* 85.82
3. Hartford Financial Services* 83.31
4. State Farm 80.50
5. 21st Century 79.28
6. Farmers 79.01
7. AAA 78.95
8. GMAC Insurance 78.56
9. Allstate 78.10
10. Travelers 77.57
11. GEICO 77.46
12. Erie Insurance 76.90
13. Liberty Mutual 76.14
14. Country Insurance 75.89
15. Nationwide 74.68
16. American Family 74.05
17. Progressive 73.69
18. Mercury General 72.05
19. MetLife 72.01
20. Esurance 71.19
Home insurance companies
1. USAA* 98.11
2. Amica Mutual* 97.67
3. Chubb* 92.19
4. Erie Insurance 88.72
5. Country Insurance 85.75
6. AAA 84.66
7. Nationwide 83.53
8. State Farm 82.34
9. MetLife 81.68
10. 21st Century 80.79
11. The Hartford 80.44
12. Travelers 79.79
13. Liberty Mutual 79.03
14. Farmers 78.71
15. Allstate 78.55
16. Auto-Owners Insurance 78.48
17. American Family 77.10
18. Universal Property & Casualty 75.05
19. Fireman's Fund 73.66
20. Citizens Property Insurance 64.15
Life insurance companies
1. Ameriprise Financial* 90.90
2. TIAA-CREF Life Insurance* 88.58
3. Transamerica* 81.28
4. Northwestern Mutual 81.23
5. New York Life 80.36
6. Pacific Life 79.99
7. Massachusetts Mutual 79.62
8. MetLife 79.39
9. Allstate 78.94
10. Prudential Financial 78.64
11. Principal 77.59
12. John Hancock 77.02
13. Hartford Life 73.75
14. AXA Equitble 73.58
15. Great-West Life 73.05
16. Jackson National 71.80
17. American General 70.86
18. ING Life Insurance 69.32
19. Lincoln National 68.12
20. Aviva Life Insurance 59.94
Health insurance companies
1. BCBS of Illinois* 84.74
2. Horizon BCBS of NJ* 84.52
3. Kaiser Permanente* 84.45
4. Highmark BCBS 82.27
5. Regence BCBS 82.17
6. Humana 81.87
7. BCBS of Massachusetts 81.46
8. Independence BCBS 81.33
9. CareFirst BCBS 80.24
10. UnitedHealthcare 79.23
11. BCBS of Florida 78.70
12. Anthem BCBS 78.29
13. Aetna 77.78
14. CIGNA 76.17
15. Coventry Health Care 73.19
16. Aetna Life (Dental, Etc.) 72.48
17. Health Net 71.91
18. Assurant 60.85
19. Blue Shield of California 59.20
• Indicates the company is an Insure.com "People's Choice Award" winner.
Methodology
Insure.com surveyed more than 4,500 insurance customers between February and August 2011 for customer service ratings and reviews. The survey included the top companies by market share, but not all large companies may be represented due to lack of data. The top three companies in each category earned Insure.com’s “People’s Choice Award.”
Insure.com makes reviews freely available via this site. The views and opinions expressed by users do not reflect the views and opinions of Insure.com. Insure.com expressly disclaims any and all liability in connection with the content of any reviews.
About Insure.com Insure.com is a comprehensive resource of consumer insurance information and data. The website features articles, news and tools on auto, home, health and life insurance topics, life insurance quotes, and car insurance comparison tools. Consumers have access to free car insurance quotes and guidance on finding the right insurance policy, saving money and solving claims problems. Insure.com is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), one of the largest Internet marketing and media companies in the world. QuinStreet is committed to providing consumers and businesses with the information they need to research, find and select the products, services and brands that best meet their needs. The company is a leader in visitor-friendly marketing practices. For more information, please visit QuinStreet.com.
Press contact:
Amy Danise
860-386-6446
adanise(at)insure(dot)com
Access Source And Its Great Content: http://insurancenewsnet.com/article.aspx?id=325643&type=lifehealth&inl=1
A new national study of satisfaction ratings conducted by Insure.com provides a comprehensive view of how consumers feel about the largest auto, home, health and life insurance companies in the U.S.
In addition to the survey results, Insure.com has released a Best Insurance Companies tool which allows consumers to see how their insurer measures up against the competition when it comes to customer satisfaction. The tool breaks out five measurements of satisfaction:
1.Customer service“This is an in-depth resource for consumers who are considering their insurance options,” said Amy Danise, Insure.com’s Editorial Director. “Our analysis lets consumers gain valuable insight into how the major companies are performing on five important levels of customer satisfaction.”
2.Claims experience
3.Value for the price paid
4.Percent who plan to renew their policies
5.Percent who would recommend their companies
Insure.com also awarded its “People’s Choice Award” to the three highest-scoring insurers in each line of business included in its study.
Best car insurance companies
1.USAABest home insurance companies
2.Auto-Owners Insurance
3.The Hartford
1.USAA
2.Amica Mutual
3.Chubb
Best life insurance companies
1.Ameriprise FinancialBest health insurance companies
2.TIAA-CREF
3.Transamerica
1.Blue Cross Blue Shield of IllinoisInsure.com’s analysis of the customer ratings revealed that insurance consumers are generally satisfied with their companies:
2.Horizon Blue Cross Blue Shield of New Jersey
3.Kaiser Permanente
• Most consumers are “completely” or “somewhat” satisfied with their auto insurers’ customer service.
•73 percent are satisfied with home insurance customer service.
•63 percent are satisfied with their life insurers’ customer service.
•61 percent are satisfied with their health insurance customer service.For complete details and to use Insure.com’s Best Insurance Companies tool to explore customer satisfaction ratings, visit http://www.insure.com/best-insurance-companies.html.
•70 percent say they have recommended or would recommend their auto insurance company. In other categories, people who have recommended or would recommend their insurers totaled 67 percent for home insurance, 58 percent for health insurance and 50 percent for health insurance.
The rankings
Rank – Insurance Company – Overall Score out of 100
Auto insurance companies
1. USAA* 98.00
2. Auto-Owners Insurance* 85.82
3. Hartford Financial Services* 83.31
4. State Farm 80.50
5. 21st Century 79.28
6. Farmers 79.01
7. AAA 78.95
8. GMAC Insurance 78.56
9. Allstate 78.10
10. Travelers 77.57
11. GEICO 77.46
12. Erie Insurance 76.90
13. Liberty Mutual 76.14
14. Country Insurance 75.89
15. Nationwide 74.68
16. American Family 74.05
17. Progressive 73.69
18. Mercury General 72.05
19. MetLife 72.01
20. Esurance 71.19
Home insurance companies
1. USAA* 98.11
2. Amica Mutual* 97.67
3. Chubb* 92.19
4. Erie Insurance 88.72
5. Country Insurance 85.75
6. AAA 84.66
7. Nationwide 83.53
8. State Farm 82.34
9. MetLife 81.68
10. 21st Century 80.79
11. The Hartford 80.44
12. Travelers 79.79
13. Liberty Mutual 79.03
14. Farmers 78.71
15. Allstate 78.55
16. Auto-Owners Insurance 78.48
17. American Family 77.10
18. Universal Property & Casualty 75.05
19. Fireman's Fund 73.66
20. Citizens Property Insurance 64.15
Life insurance companies
1. Ameriprise Financial* 90.90
2. TIAA-CREF Life Insurance* 88.58
3. Transamerica* 81.28
4. Northwestern Mutual 81.23
5. New York Life 80.36
6. Pacific Life 79.99
7. Massachusetts Mutual 79.62
8. MetLife 79.39
9. Allstate 78.94
10. Prudential Financial 78.64
11. Principal 77.59
12. John Hancock 77.02
13. Hartford Life 73.75
14. AXA Equitble 73.58
15. Great-West Life 73.05
16. Jackson National 71.80
17. American General 70.86
18. ING Life Insurance 69.32
19. Lincoln National 68.12
20. Aviva Life Insurance 59.94
Health insurance companies
1. BCBS of Illinois* 84.74
2. Horizon BCBS of NJ* 84.52
3. Kaiser Permanente* 84.45
4. Highmark BCBS 82.27
5. Regence BCBS 82.17
6. Humana 81.87
7. BCBS of Massachusetts 81.46
8. Independence BCBS 81.33
9. CareFirst BCBS 80.24
10. UnitedHealthcare 79.23
11. BCBS of Florida 78.70
12. Anthem BCBS 78.29
13. Aetna 77.78
14. CIGNA 76.17
15. Coventry Health Care 73.19
16. Aetna Life (Dental, Etc.) 72.48
17. Health Net 71.91
18. Assurant 60.85
19. Blue Shield of California 59.20
• Indicates the company is an Insure.com "People's Choice Award" winner.
Methodology
Insure.com surveyed more than 4,500 insurance customers between February and August 2011 for customer service ratings and reviews. The survey included the top companies by market share, but not all large companies may be represented due to lack of data. The top three companies in each category earned Insure.com’s “People’s Choice Award.”
Insure.com makes reviews freely available via this site. The views and opinions expressed by users do not reflect the views and opinions of Insure.com. Insure.com expressly disclaims any and all liability in connection with the content of any reviews.
About Insure.com Insure.com is a comprehensive resource of consumer insurance information and data. The website features articles, news and tools on auto, home, health and life insurance topics, life insurance quotes, and car insurance comparison tools. Consumers have access to free car insurance quotes and guidance on finding the right insurance policy, saving money and solving claims problems. Insure.com is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), one of the largest Internet marketing and media companies in the world. QuinStreet is committed to providing consumers and businesses with the information they need to research, find and select the products, services and brands that best meet their needs. The company is a leader in visitor-friendly marketing practices. For more information, please visit QuinStreet.com.
Press contact:
Amy Danise
860-386-6446
adanise(at)insure(dot)com
Access Source And Its Great Content: http://insurancenewsnet.com/article.aspx?id=325643&type=lifehealth&inl=1
Monday, December 12, 2011
Managing Catastrophe Model Uncertainty, Issues and Challenges: Part I, Executive Summary - Guy Carpenter Capital Ideas
December 12th, 2011
Posted at 1:00 AM ETJohn Major, Director of Actuarial Research, GC Analytics®
Uncertainty is ever present in the insurance business, and despite relentless enhancements in data gathering and processing power, it is still a large factor in risk modeling and assessment. This realization, driven home by model changes and recent unexpected natural catastrophes, can be disconcerting - even frightening - to industry participants. But companies that understand the vagaries of model uncertainty and take a disciplined, holistic approach to managing the catastrophe modeling process are well positioned to adapt and outperform the competition.
In this report, presented this week on GC Capital Ideas, we examine effective modeling management as it relates to property catastrophe models used by primary writers of property insurance. We advocate adopting a multiple catastrophe-model approach to better estimate risk and control uncertainty. A broader discussion follows, suggesting how the industry should incorporate model uncertainty in its consideration of catastrophe risk.
Since the introduction of the first commercially available catastrophe (cat) models in the late 1980s, models have evolved, driven by improved science and the knowledge acquired from more recent catastrophes. Today, there are several major commercial vendors of modeling services, and virtually every insurer or reinsurer uses some model - their own, a vendor’s, or, in many cases, more than one.
Despite considerable refinement of the models over the decades, uncertainty remains - and it is a significantly bigger factor than many users may recognize. In 1999, Guy Carpenter & Company published estimates of the amount of uncertainty in U.S. hurricane risk models. The conclusion: a two standard error interval (a plausible range that has a 68 percent chance of including the true, but unknown, value) for a national writer’s 100-year or higher probable maximum loss (PML) goes from 50 percent to 230 percent of the PML estimate produced by the model.
The “uncertainty band” around a typical PML curve paints a more realistic - and much less precise - picture of catastrophe model output. [Access Article To See Graph]
Advances within the modeling industry since 1999 have indeed reduced the width of the uncertainty band, but the consideration of smaller areas of geography only introduces additional uncertainty. Today, we may crudely estimate confidence intervals as: [Access Article To See Graph]
While models have considerable uncertainty associated with them, they are still valuable tools, taking their place with scenario analysis and exposure accumulation studies. In fact, they can be viewed as extensions of both of these types of analyses.
Coping successfully with cat model uncertainty involves a number of approaches. In many cases, multiple models can be engaged to help narrow the uncertainty band. Multi-model techniques include “blending” (averaging) the model outputs, “morphing” one model’s output to reflect the characteristics of another model’s, or “fusing” model components (or at least outputs) into what is in effect a new model. In each case the correct selection of specific weight parameters and methodologies is critically important and needs to be informed by the adequacies and shortcomings of each model.
In addition to helping to reduce some (but not all) sources of uncertainty, a multiple model approach can also help smooth out the impact of individual model changes - which seem to have an increasingly acute effect on the industry.
More broadly, we encourage companies to embed awareness of model uncertainty into their overall enterprise risk management (ERM) process, and make catastrophe-risk-oriented decisions with a conscious eye towards the possibility of model error.
The issues of model uncertainty and change pose many difficult challenges for the industry. The “black box” should no longer be left to make the decisions. Rather, it should be considered a tool to help inform decisions made by (human) professionals. This is an intuitive and straightforward prescription, but making it happen will require the consideration and engagement of virtually every group in the industry.
Posted at 1:00 AM ETJohn Major, Director of Actuarial Research, GC Analytics®
Uncertainty is ever present in the insurance business, and despite relentless enhancements in data gathering and processing power, it is still a large factor in risk modeling and assessment. This realization, driven home by model changes and recent unexpected natural catastrophes, can be disconcerting - even frightening - to industry participants. But companies that understand the vagaries of model uncertainty and take a disciplined, holistic approach to managing the catastrophe modeling process are well positioned to adapt and outperform the competition.
In this report, presented this week on GC Capital Ideas, we examine effective modeling management as it relates to property catastrophe models used by primary writers of property insurance. We advocate adopting a multiple catastrophe-model approach to better estimate risk and control uncertainty. A broader discussion follows, suggesting how the industry should incorporate model uncertainty in its consideration of catastrophe risk.
Since the introduction of the first commercially available catastrophe (cat) models in the late 1980s, models have evolved, driven by improved science and the knowledge acquired from more recent catastrophes. Today, there are several major commercial vendors of modeling services, and virtually every insurer or reinsurer uses some model - their own, a vendor’s, or, in many cases, more than one.
Despite considerable refinement of the models over the decades, uncertainty remains - and it is a significantly bigger factor than many users may recognize. In 1999, Guy Carpenter & Company published estimates of the amount of uncertainty in U.S. hurricane risk models. The conclusion: a two standard error interval (a plausible range that has a 68 percent chance of including the true, but unknown, value) for a national writer’s 100-year or higher probable maximum loss (PML) goes from 50 percent to 230 percent of the PML estimate produced by the model.
The “uncertainty band” around a typical PML curve paints a more realistic - and much less precise - picture of catastrophe model output. [Access Article To See Graph]
Advances within the modeling industry since 1999 have indeed reduced the width of the uncertainty band, but the consideration of smaller areas of geography only introduces additional uncertainty. Today, we may crudely estimate confidence intervals as: [Access Article To See Graph]
While models have considerable uncertainty associated with them, they are still valuable tools, taking their place with scenario analysis and exposure accumulation studies. In fact, they can be viewed as extensions of both of these types of analyses.
Coping successfully with cat model uncertainty involves a number of approaches. In many cases, multiple models can be engaged to help narrow the uncertainty band. Multi-model techniques include “blending” (averaging) the model outputs, “morphing” one model’s output to reflect the characteristics of another model’s, or “fusing” model components (or at least outputs) into what is in effect a new model. In each case the correct selection of specific weight parameters and methodologies is critically important and needs to be informed by the adequacies and shortcomings of each model.
In addition to helping to reduce some (but not all) sources of uncertainty, a multiple model approach can also help smooth out the impact of individual model changes - which seem to have an increasingly acute effect on the industry.
More broadly, we encourage companies to embed awareness of model uncertainty into their overall enterprise risk management (ERM) process, and make catastrophe-risk-oriented decisions with a conscious eye towards the possibility of model error.
The issues of model uncertainty and change pose many difficult challenges for the industry. The “black box” should no longer be left to make the decisions. Rather, it should be considered a tool to help inform decisions made by (human) professionals. This is an intuitive and straightforward prescription, but making it happen will require the consideration and engagement of virtually every group in the industry.
» Modeling firms need to step up and lead the discussion about uncertainty despite the apparent competitive disadvantage of transparency.Access Source For Article, Illustrative Graphs And Other Great Content: http://www.gccapitalideas.com/2011/12/12/managing-catastrophe-model-uncertainty-issues-and-challenges-executive-summary/
» Primary writers need to be smarter consumers of models and model output, curtailing the blind application of “portfolio optimization” in favor of a broader ERM-based multi-model approach. They also need to rethink their attitudes about nontraditional risk transfer products.
» Reinsurers, already sophisticated model users, should not take advantage of information asymmetry, but rather explore which new products might make sense.
» Rating agencies and solvency regulators need to equally investigate the models to determine when a model is being appropriately utilized. They need to understand that “the map is not the territory” - model output is relative information, not absolute gospel, and firms need time to absorb and act upon this information when model changes occur.
» Boards of directors, investors and stock analysts need to understand cat risk in the same terms - being estimated with significant uncertainty - as other financial risks. Insureds and the public need to understand that no one really knows the right answer.
» Brokers, finally, need to stay out in front to facilitate education, communication and fair dealing.
Wednesday, November 16, 2011
Insuring life's quirky perils - William P. Barrett - Forbes
Excerpts:
Insuring life's quirky perilsEveryone knows about long-established insurance for home, car and health. But other coverages out there can afford protection for narrow perils of modern-day living, often at a surprisingly low cost.
1. Change-of-heart protection
2. Wine collection
3. Green upgrade
4. ID theft
5. No-show wedding photographer
6. Travel
7. Pet's life
8. Kidnapping 9. Damaged wedding gown
10. UFO abduction
Access Source And Its Great Content: http://www.forbes.com/pictures/mjf45emgl/insuring-lifes-quirky-perils
Insuring life's quirky perilsEveryone knows about long-established insurance for home, car and health. But other coverages out there can afford protection for narrow perils of modern-day living, often at a surprisingly low cost.
1. Change-of-heart protection
2. Wine collection
3. Green upgrade
4. ID theft
5. No-show wedding photographer
6. Travel
7. Pet's life
8. Kidnapping 9. Damaged wedding gown
10. UFO abduction
Access Source And Its Great Content: http://www.forbes.com/pictures/mjf45emgl/insuring-lifes-quirky-perils
Monday, September 5, 2011
Chart: Property & Casualty M&A Activity 2003 to Present | GCCapitalIdeas.com
Chart: Property & Casualty M&A Activity 2003 to Present GCCapitalIdeas.com
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http://www.gccapitalideas.com/2011/09/05/chart-property-casualty-ma-activity-2003-to-present/
September 5th, 2011
Chart: Property & Casualty M&A Activity 2003 to Present
Posted at 1:00 AM ET
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Access Content Source And Other Great Stuff:
Wednesday, February 16, 2011
Europe's Solvency II to have major U.S. impact: Analysis | Business Insurance
Europe's Solvency II to have major U.S. impact: Analysis Business Insurance
Excerpts:
Mr. Mills, a former New York insurance superintendent who is Deloitte’s director and chief adviser of its insurance industry group, said while Solvency II’s impact will depend on the degree to which an insurer is U.S. based and has European or global subsidiaries, “ultimately even purely domestic U.S. insurers will be impacted.”
********************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Excerpts:
Mr. Mills, a former New York insurance superintendent who is Deloitte’s director and chief adviser of its insurance industry group, said while Solvency II’s impact will depend on the degree to which an insurer is U.S. based and has European or global subsidiaries, “ultimately even purely domestic U.S. insurers will be impacted.”
********************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Saturday, February 5, 2011
The Super Bowl’s Super Risks | PropertyCasualty360
The Super Bowl’s Super Risks PropertyCasualty360
Note from Jim: A brief and interesting article. I recommend that you give it a read.
The Super Bowl's Super Risks
By Mary Anne Medina
The Super Bowl draws a huge crowd and millions of viewers, but as with any big event, there's big risk involved…
********************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Note from Jim: A brief and interesting article. I recommend that you give it a read.
The Super Bowl's Super Risks
By Mary Anne Medina
The Super Bowl draws a huge crowd and millions of viewers, but as with any big event, there's big risk involved…
********************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Tuesday, August 10, 2010
Insurance Jobs Hit By Recession, But P&C Adds Workers In June - Undesignated - Property and Casualty Insurance News
Insurance Jobs Hit By Recession, But P&C Adds Workers In June - Undesignated - Property and Casualty Insurance News
********************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Insurance Jobs Hit By Recession, But P&C Adds Workers In June
Published 8/9/2010
NU Online News Service, August 9, 1:32 p.m. EDT
Since the economic recession began in December 2007, employment in the insurance industry has decreased across multiple sectors, according to a new report.
The Insurance Information Institute’s (I.I.I.) report, “Insurance Industry Employment Trends: 1990-2010,” examines employment trends for property and casualty, life and health insurers, reinsurers, agents, brokers, claims adjusters, and third-party administrators.
I.I.I. noted that data in the report is through June 2010.
The report found that employment in the p&c insurance industry is down by 27,000 jobs, or 5.5 percent, to 464,100 since the recession began.
The report also noted p&c insurance employment is down by 17,700 jobs compared to June of 2009 but is up by 1,700 jobs from May of this year.
The 0.4 percent increase in June could help reverse a trend of declining p&c employment each month since August 2009, the report said.
Additionally, I.I.I. said employment in the reinsurance industry was down by 1,400 jobs, or 5.2 percent, to 25,500 since Dec. 2007.
Compared to June 2009, employment in this sector is down by 7.6 percent and is down by 0.4 percent from May 2010.
Employment at insurance agencies and brokerages is down by 48,800 jobs, or 7.2 percent, to 630,800 since Dec. 2007.
Agent and broker employment is down by 3.1 percent compared to June 2009 and up 0.2 percent from May 2010.
There are now 51,400 fewer agents and brokers than there were three years ago, the report noted.
Claims adjusting employment was also down by 8,500 jobs, or 16.3 percent, to 43,500 since Dec. 2007.
Employment in this sector is down by 5,100 compared to June 2009 but has not changed from May 2010.
The report noted that life insurance industry employment was down by 9,300 jobs, or 2.6 percent, to 345,000 since the recession began in Dec. 2007. But, life insurers added 1,900 employees in June, while health insurers shed 1,900—the fourth month in a row of declining employment in this sector.
********************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Tuesday, October 13, 2009
EARNINGS PREVIEW:US Property Insurers Expect Rising 3Q Earnings - WSJ.com
EARNINGS PREVIEW:US Property Insurers Expect Rising 3Q Earnings - WSJ.com
***********************************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
***********************************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Tuesday, September 8, 2009
Predictive Models Won’t Replace People, But Can Help With Underwriting, Claims - Risk Management - Property and Casualty Insurance News
Predictive Models Won’t Replace People, But Can Help With Underwriting, Claims - Risk Management - Property and Casualty Insurance News:
"Breaking News
NU Exclusives
Predictive Models Won’t Replace People, But Can Help With Underwriting, Claims
New tech tools allow insurers to spot patterns or key correlations for human review
By DANIEL HAYS
Published 9/7/2009
Predictive Models Won’t Replace People, But Can Help With Underwriting, Claims
New tech tools allow insurers to spot patterns or key correlations for human review
By DANIEL HAYS
Published 9/7/2009
Orlando
While predictive modeling won’t replace knowledgeable insurance adjusters and underwriters, it is the wave of the future for the workers’ compensation industry, a trio of experts here stressed.
Jennifer Tomilin, senior vice president at Zurich North America, said she could not foresee human underwriters ever being replaced by automation because “there are areas where we don’t have enough data for predictive modeling.”
However, modeling will be a big part of every insurer’s future, while companies that are “stuck in the mud” and fail to take advantage of this evolving technology, “those folks are going to be left behind,” warned Steve Laudermilch, senior manager at Deloitte Consulting.
The three panelists offered their views and predictions during a panel session—“Tech To The Rescue: Can Predictive Analytics Save Workers’ Comp?”—here at the annual Workers’ Compensation Educational Conference. The session was part of the National Trends program put together by National Underwriter in partnership with the WCEC organizers—the Florida Workers’ Compensation Institute.
The speakers outlined a variety of ways in which modeling is used, what data types it employs and what it targets.
Ms. Tomilin said modeling—sometimes called data mining—is an analysis that finds unsuspected relationships that relate to data in novel ways.
For example, in researching a company, the modeler might look at how many employees in a particular ZIP code work from home, figuring a return to work program might be easier to employ for an injured employee who does not have to commute to their job.
Some data that is sifted through is ultimately tossed out, she noted, giving an example of an examination of sweet dessert purchases in a certain ZIP code for a possible link to truck accidents, because eating sugar can cause drowsiness.
She also noted that discriminatory data of the kind once used in redlining is rejected.
The value of predictive models, she said, is that they take “a lot of the subjectivity out” of analysis and eliminate “the gut-feel practices” of underwriters.
Predictive modeling can serve insurers by, among other things, targeting fraud, identifying claimants who will benefit by treatment from a specialist, and in helping to “triage claims,” according to Kaleb Adams, vice president of Predictive Modeling at Specialty Risk Services.
While he said data from an insurer’s underwriting department is not always that reliable or useful in predictive modeling, solid data is voluminous from the claims sector and can be used to provide facts concerning a loss, a worker’s claims history and co-morbidity factors such as obesity.
He said modeling can pin down cases that would benefit from having a special nurse assigned, those that indicate they will involve a large loss, and those that need less attention.
Mr. Adams said the system can use text mining to read over notes and identify a potential fraud situation, a health problem such as morbid obesity, or a risk management threat such as a wet floor.
Models that are used, Mr. Laudermilch noted, are built by testing the impact of hundreds of variables—such as lifestyle, age, employment history and pharmacy drug use—against closed claims.
The models, he said, will be based on data on injury groups, such as back strains, to identify which are the more serious cases in relation to all the others.
“This is not a replacement for adjusters,” he noted. “The idea is to give them claims they can work on, where they can make a big impact” accelerating best practices.
Explaining some of the areas where data is derived, Mr. Laudermilch noted that companies glean it from items such as warrantee forms that customers fill out.
Learning that a person has interests in outdoor pursuits or running for fitness can lead to a conclusion that if injured, “they are probably motivated to get healthy”—more so, perhaps, than someone who is a “couch potato,” he added.
Read Original Post: http://www.property-casualty.com/Issues/2009/September%207%202009/Pages/Predictive-Models-Wont-Replace-People-But-Can-Help-With-Underwriting-Claims.aspx
***********************************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
"Breaking News
NU Exclusives
Predictive Models Won’t Replace People, But Can Help With Underwriting, Claims
New tech tools allow insurers to spot patterns or key correlations for human review
By DANIEL HAYS
Published 9/7/2009
Predictive Models Won’t Replace People, But Can Help With Underwriting, Claims
New tech tools allow insurers to spot patterns or key correlations for human review
By DANIEL HAYS
Published 9/7/2009
Orlando
While predictive modeling won’t replace knowledgeable insurance adjusters and underwriters, it is the wave of the future for the workers’ compensation industry, a trio of experts here stressed.
Jennifer Tomilin, senior vice president at Zurich North America, said she could not foresee human underwriters ever being replaced by automation because “there are areas where we don’t have enough data for predictive modeling.”
However, modeling will be a big part of every insurer’s future, while companies that are “stuck in the mud” and fail to take advantage of this evolving technology, “those folks are going to be left behind,” warned Steve Laudermilch, senior manager at Deloitte Consulting.
The three panelists offered their views and predictions during a panel session—“Tech To The Rescue: Can Predictive Analytics Save Workers’ Comp?”—here at the annual Workers’ Compensation Educational Conference. The session was part of the National Trends program put together by National Underwriter in partnership with the WCEC organizers—the Florida Workers’ Compensation Institute.
The speakers outlined a variety of ways in which modeling is used, what data types it employs and what it targets.
Ms. Tomilin said modeling—sometimes called data mining—is an analysis that finds unsuspected relationships that relate to data in novel ways.
For example, in researching a company, the modeler might look at how many employees in a particular ZIP code work from home, figuring a return to work program might be easier to employ for an injured employee who does not have to commute to their job.
Some data that is sifted through is ultimately tossed out, she noted, giving an example of an examination of sweet dessert purchases in a certain ZIP code for a possible link to truck accidents, because eating sugar can cause drowsiness.
She also noted that discriminatory data of the kind once used in redlining is rejected.
The value of predictive models, she said, is that they take “a lot of the subjectivity out” of analysis and eliminate “the gut-feel practices” of underwriters.
Predictive modeling can serve insurers by, among other things, targeting fraud, identifying claimants who will benefit by treatment from a specialist, and in helping to “triage claims,” according to Kaleb Adams, vice president of Predictive Modeling at Specialty Risk Services.
While he said data from an insurer’s underwriting department is not always that reliable or useful in predictive modeling, solid data is voluminous from the claims sector and can be used to provide facts concerning a loss, a worker’s claims history and co-morbidity factors such as obesity.
He said modeling can pin down cases that would benefit from having a special nurse assigned, those that indicate they will involve a large loss, and those that need less attention.
Mr. Adams said the system can use text mining to read over notes and identify a potential fraud situation, a health problem such as morbid obesity, or a risk management threat such as a wet floor.
Models that are used, Mr. Laudermilch noted, are built by testing the impact of hundreds of variables—such as lifestyle, age, employment history and pharmacy drug use—against closed claims.
The models, he said, will be based on data on injury groups, such as back strains, to identify which are the more serious cases in relation to all the others.
“This is not a replacement for adjusters,” he noted. “The idea is to give them claims they can work on, where they can make a big impact” accelerating best practices.
Explaining some of the areas where data is derived, Mr. Laudermilch noted that companies glean it from items such as warrantee forms that customers fill out.
Learning that a person has interests in outdoor pursuits or running for fitness can lead to a conclusion that if injured, “they are probably motivated to get healthy”—more so, perhaps, than someone who is a “couch potato,” he added.
Read Original Post: http://www.property-casualty.com/Issues/2009/September%207%202009/Pages/Predictive-Models-Wont-Replace-People-But-Can-Help-With-Underwriting-Claims.aspx
***********************************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Saturday, September 5, 2009
PwC Report Predicts Competitive Realignment of Global Insurance Sector - - insurancenewsnet.com
PwC Report Predicts Competitive Realignment of Global Insurance Sector - - insurancenewsnet.com
PwC Report Predicts Competitive Realignment of Global Insurance Sector >
Copyright: A.M. Best Company, Inc. Source: BestWire Services Wordcount: >
As a "watershed" for the insurance sector, the international financial crisis is pointing the way toward a deep competitive realignment of the global insurance industry, according to consultants PricewaterhouseCoopers.
"This shake-up will challenge the competitive relevance of some insurers," PricewaterhouseCoopers said in a report. "However, it also offers agile and far-sighted firms a once-in-a-generation opportunity to catapult themselves to the front of what will be a very different racing order within many geographical markets and classes of business."
The report described an unfolding environment of changing expectations of the insurance sector from governments, regulators, customers and investors.
"We've tried to cast some light on the future of the insurance industry, not tomorrow, but the day after," Achim Bauer, a partner at PwC in London, said.
"The developments we see today are only the beginning," PwC said in a statement accompanying the report. "The environment will continue to evolve at a rapid pace over the next two to three years, ruling out any return to the relative stability and certainty that preceded the crisis."
In PwC's view, the international insurance industry will be marked by such factors as organic restructuring, increasing uncertainty over taxation, pressure on reinsurance sales in developed markets, and a growth in both regulation government assertiveness toward the industry.
"The market and economic environment in which insurers operate is subject to considerable uncertainty," PwC said. "Success will depend on close monitoring of developments and the ability to move quickly to capitalize on opportunities as the situation becomes clearer."
Bauer said the insurance industry has not received the same attention that has been focused on the banking sector during the economic crisis. But insurers faced similar problems to the banks, he argued. These have included a squeeze on assets and reductions in yields and asset quality.
"You see significant impacts on the premium levels" in reinsurance, life and nonlife, he said, adding that capital has become harder to obtain.
The organic restructuring, PwC said, will be influenced by exits from some markets and reductions in some lines. The result, the report suggested, will be openings for insurers that are left and a "significant reconfiguration in the list of leading players."
The tax environment, PwC said, will be clouded by attempts to strengthen government finances and to contain offshore arrangements. The choice of corporate domiciles will become more important, the report said. Insurers also will face tougher financial reporting demands as they compete for capital, according to PwC.
The insurance industry, PWC said, is also likely to be affected by such trends as closer scrutiny of remuneration, higher expectations by retail customers of the life sector, and a revival of mergers and acquisitions activity.
As government regulation becomes more attentive, the report said, it also "will be more subject to national priorities in their interpretation and application." The role of governments in relation to the industry, PwC added, will be boosted by such factors as bailouts, changes in regulation and actions taking regarding health care and pensions.
PricewaterhouseCoopers said an expected increased appetite for reinsurance in emerging markets "is unlikely to offset the decline in reinsurance buying in developed markets and may force many reinsurers to rethink how they sustain profitability and growth."
The winners in the coming environment will be those companies that will be able to understand the long-term competitive implications of the current economic downturn, PwC said.
(By Robert O'Connor, London editor: Robert.OConnor@ambest.com)
Read Source Post: http://insurancenewsnet.com/article.asp?n=1&neID=Mh5JfAtte-ZmhnYqEZFPh5AUSytbGTiCkwLYwI3rnqkfIkXphoXfZZRKYr--MBD4
***********************************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
PwC Report Predicts Competitive Realignment of Global Insurance Sector >
Copyright: A.M. Best Company, Inc. Source: BestWire Services Wordcount: >
As a "watershed" for the insurance sector, the international financial crisis is pointing the way toward a deep competitive realignment of the global insurance industry, according to consultants PricewaterhouseCoopers.
"This shake-up will challenge the competitive relevance of some insurers," PricewaterhouseCoopers said in a report. "However, it also offers agile and far-sighted firms a once-in-a-generation opportunity to catapult themselves to the front of what will be a very different racing order within many geographical markets and classes of business."
The report described an unfolding environment of changing expectations of the insurance sector from governments, regulators, customers and investors.
"We've tried to cast some light on the future of the insurance industry, not tomorrow, but the day after," Achim Bauer, a partner at PwC in London, said.
"The developments we see today are only the beginning," PwC said in a statement accompanying the report. "The environment will continue to evolve at a rapid pace over the next two to three years, ruling out any return to the relative stability and certainty that preceded the crisis."
In PwC's view, the international insurance industry will be marked by such factors as organic restructuring, increasing uncertainty over taxation, pressure on reinsurance sales in developed markets, and a growth in both regulation government assertiveness toward the industry.
"The market and economic environment in which insurers operate is subject to considerable uncertainty," PwC said. "Success will depend on close monitoring of developments and the ability to move quickly to capitalize on opportunities as the situation becomes clearer."
Bauer said the insurance industry has not received the same attention that has been focused on the banking sector during the economic crisis. But insurers faced similar problems to the banks, he argued. These have included a squeeze on assets and reductions in yields and asset quality.
"You see significant impacts on the premium levels" in reinsurance, life and nonlife, he said, adding that capital has become harder to obtain.
The organic restructuring, PwC said, will be influenced by exits from some markets and reductions in some lines. The result, the report suggested, will be openings for insurers that are left and a "significant reconfiguration in the list of leading players."
The tax environment, PwC said, will be clouded by attempts to strengthen government finances and to contain offshore arrangements. The choice of corporate domiciles will become more important, the report said. Insurers also will face tougher financial reporting demands as they compete for capital, according to PwC.
The insurance industry, PWC said, is also likely to be affected by such trends as closer scrutiny of remuneration, higher expectations by retail customers of the life sector, and a revival of mergers and acquisitions activity.
As government regulation becomes more attentive, the report said, it also "will be more subject to national priorities in their interpretation and application." The role of governments in relation to the industry, PwC added, will be boosted by such factors as bailouts, changes in regulation and actions taking regarding health care and pensions.
PricewaterhouseCoopers said an expected increased appetite for reinsurance in emerging markets "is unlikely to offset the decline in reinsurance buying in developed markets and may force many reinsurers to rethink how they sustain profitability and growth."
The winners in the coming environment will be those companies that will be able to understand the long-term competitive implications of the current economic downturn, PwC said.
(By Robert O'Connor, London editor: Robert.OConnor@ambest.com)
Read Source Post: http://insurancenewsnet.com/article.asp?n=1&neID=Mh5JfAtte-ZmhnYqEZFPh5AUSytbGTiCkwLYwI3rnqkfIkXphoXfZZRKYr--MBD4
***********************************************************************
http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Wednesday, July 1, 2009
Insurance industry consolidation likely to rise: Report | Business Insurance
Insurance industry consolidation likely to rise: Report Business Insurance
Posted On: Jun. 22, 2009 2:32 PM CST
Judy Greenwald
Excerpts:
Printed from BusinessInsurance.com
Insurance industry consolidation likely to rise: Report
Posted On: Jun. 22, 2009 2:32 PM CST
Judy Greenwald
Consolidation in the insurance industry is likely to increase this year should companies resolve their financial problems, Deloitte L.L.P. said Monday in a report.
“For both life and (property/casualty) companies, mergers and divestitures can serve as a potentially effective means to increase capital and maintain ratings,” said the report on the insurance industry's merger and acquisition outlook.
“Moreover, it appears many large financial institutions and insurers are looking to shed noncore insurance businesses in order to raise capital. This could fuel a new wave of acquisitions as more insurance companies may be available at attractive valuations,” the report said.
The report said the likely acquirers, “other than Chinese or Japanese companies flush with foreign currency, may well be those Bermuda and European insurers that have avoided major investment losses.”
A major challenge facing buyers, though, will be to structure deals without increasing exposure to investment losses, which means some strategic buyers are seeking to acquire underwriting teams instead of companies, the report said.
The Deloitte report analyzed key factors likely to affect insurance M&A activity. Factors having a near-term effect are evolving M&A strategic objectives, investment valuations and subprime exposures, capital challenges, low valuations and integration challenges.
Under the category of regulatory and financial reporting, factors include changes in insurance company regulation, a push for a globally accepted insurance accounting standard, tax issues and legislation, according to the consulting firm's report.
Copies of the report, “The 2009 Insurance M&A Outlook, Opportunity in an Uncertain Environment,” are available at Deloitte's Web site at: www.deloitte.com/us/insurance.
Read Full Article: http://www.businessinsurance.com/article/20090622/NEWS/906229987
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Posted On: Jun. 22, 2009 2:32 PM CST
Judy Greenwald
Excerpts:
Printed from BusinessInsurance.com
Insurance industry consolidation likely to rise: Report
Posted On: Jun. 22, 2009 2:32 PM CST
Judy Greenwald
Consolidation in the insurance industry is likely to increase this year should companies resolve their financial problems, Deloitte L.L.P. said Monday in a report.
“For both life and (property/casualty) companies, mergers and divestitures can serve as a potentially effective means to increase capital and maintain ratings,” said the report on the insurance industry's merger and acquisition outlook.
“Moreover, it appears many large financial institutions and insurers are looking to shed noncore insurance businesses in order to raise capital. This could fuel a new wave of acquisitions as more insurance companies may be available at attractive valuations,” the report said.
The report said the likely acquirers, “other than Chinese or Japanese companies flush with foreign currency, may well be those Bermuda and European insurers that have avoided major investment losses.”
A major challenge facing buyers, though, will be to structure deals without increasing exposure to investment losses, which means some strategic buyers are seeking to acquire underwriting teams instead of companies, the report said.
The Deloitte report analyzed key factors likely to affect insurance M&A activity. Factors having a near-term effect are evolving M&A strategic objectives, investment valuations and subprime exposures, capital challenges, low valuations and integration challenges.
Under the category of regulatory and financial reporting, factors include changes in insurance company regulation, a push for a globally accepted insurance accounting standard, tax issues and legislation, according to the consulting firm's report.
Copies of the report, “The 2009 Insurance M&A Outlook, Opportunity in an Uncertain Environment,” are available at Deloitte's Web site at: www.deloitte.com/us/insurance.
Read Full Article: http://www.businessinsurance.com/article/20090622/NEWS/906229987
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Tuesday, June 30, 2009
P&C Insurers Post $1.3B Loss For 1Q
P&C Insurers Post $1.3B Loss For 1Q
NU Online News Service, June 29, 1:03 p.m. EDT
Excerpts:
“The bottom line is that the impact of the current financial crisis on p&c insurance, as bad as it is, in not even remotely close to impacts experienced during the Great Depression,” said Mr. Hartwig.
“While insurers remain cautious about the economy and financial market conditions, there is guarded optimism that both will continue to improve as we move into the second half of 2009,” Mr. Hartwig observed. “Fundamentally, the property and casualty insurance industry remains quite strong financially, with capital adequacy ratios remaining high relative to long-term historical averages.”
Read Full Article: http://www.property-casualty.com/News/2009/6/Pages/PC-Insurers-Post-13B-Loss-For-1Q.aspx
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
NU Online News Service, June 29, 1:03 p.m. EDT
Excerpts:
“The bottom line is that the impact of the current financial crisis on p&c insurance, as bad as it is, in not even remotely close to impacts experienced during the Great Depression,” said Mr. Hartwig.
“While insurers remain cautious about the economy and financial market conditions, there is guarded optimism that both will continue to improve as we move into the second half of 2009,” Mr. Hartwig observed. “Fundamentally, the property and casualty insurance industry remains quite strong financially, with capital adequacy ratios remaining high relative to long-term historical averages.”
Read Full Article: http://www.property-casualty.com/News/2009/6/Pages/PC-Insurers-Post-13B-Loss-For-1Q.aspx
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Wednesday, June 24, 2009
Impact Of Financial Crisis Poses Greatest Threat To Insurance Industry - Ernst & Young Report Highlights Top 10 Risks For Insurers
InsuranceBroadcasting.Com
Thursday, 06/25/09
Impact Of Financial Crisis Poses Greatest Threat To Insurance Industry - Ernst & Young Report Highlights Top 10 Risks For Insurers
NEW YORK, 23 JUNE 2009 - The impact of the financial crisis is the most significant risk facing the insurance industry, according to a new report by Ernst & Young. In the Second annual business risk report - insurance 2009, model risk and regulatory intervention rank second and third among the top ten risks.
'As a result of the current economic conditions, there have been significant changes in the risks since the release of our 2008 report,' says Peter R. Porrino, Global Director of Insurance in Ernst & Young's Global Insurance Center. 'As insurance companies continue to navigate their way through this downturn, they should be focusing on changing their approach to risk management, regulatory analysis and the communication of risk information.'
The report identifies the top 10 business risks faced by the industry as ranked by more than 100 leading sector analysts. The top ten risks this year are:
1. Financial market crisis: the crisis has severely battered the financial services industry. Even if systemic risk abates, the consequences have been so profound that they are likely to shape the industry for the next decade.
2. Model risk: the failure to recognize the shortcomings of models and to adequately capture the nature of risk have left some companies unprepared for the depth of recent financial events.
3. Regulatory intervention: organizations must prepare for"
4. Managing the non-life underwriting cycle: mismanaging the cycle is arguably the number one cause of insolvency in the non-life insurance industry and the number one contributor to losses in stakeholder value.
5. Geopolitical shocks: greater risk of geopolitical shocks is heightened by the economic slowdown, as falling incomes generate political pressures and collapsing tax revenues threaten governments' capacity to respond.
6. Demographic shifts in core markets: consumer focus on savings products increases the insurance industry's need to strategically manage capital risk, including exposure to equity markets.
7. Emerging markets: while proving to be an area of expansion for large diversified insurers, emerging markets are more susceptible to rapid and unexpected deterioration.
8. Channel distribution: even with current market conditions and an increasing focus on expense reduction, there are still significant opportunities and risks in investing in multi-distribution strategies.
9. Legal risks: unexpected changes in both the forms and sources of liability continue to be one of the greatest challenges facing non-life insurance companies.
10. Climate change and catastrophic events: extreme events are major strategic risks for the industry and have far-reaching implications for insurers paying the price for the escalating costs of rising catastrophic losses.
While much of the downside risk may have already occurred, the current market turbulence still poses an immediate threat. "In this environment, it is essential that insurance companies address product innovation, changing regulation, investment strategies and capital requirements to help retain earning power and maintain agency ratings. This will help to serve as a starting point for discussions among leadership so that their near- and long-term business strategies take these issues into account," Peter Porrino concludes. "While instability still prevails, opportunities abound for those companies that are able to rebuild and strengthen their businesses."
About Ernst & Young's Global Insurance Center
Insurers must increasingly address more complex and converging regulatory issues that challenge their risk management approaches, operations and financial reporting practices. Ernst & Young's Global Insurance Center brings together a worldwide team of professionals to help you achieve your potential - a team with deep technical experience in providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify the implications and develop points of view on relevant industry issues. Ultimately it enables us to help you meet your goals and compete more effectively. It's how Ernst & Young makes a difference.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 135,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.
For more information, please visit http://www.ey.com/ <http://www.ey.com/> .
Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
See Post At Insurance Broadcasting: http://www.insurancebroadcasting.com/insurance-news-062509-1.htm
Read Full Report At E&Y: http://www.ey.com/Publication/vwLUAssets/Second_annual_business_risk_report/$FILE/Industry_Insurance_Second_annual_business_risk_report_2009.pdf
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Thursday, 06/25/09
Impact Of Financial Crisis Poses Greatest Threat To Insurance Industry - Ernst & Young Report Highlights Top 10 Risks For Insurers
NEW YORK, 23 JUNE 2009 - The impact of the financial crisis is the most significant risk facing the insurance industry, according to a new report by Ernst & Young. In the Second annual business risk report - insurance 2009, model risk and regulatory intervention rank second and third among the top ten risks.
'As a result of the current economic conditions, there have been significant changes in the risks since the release of our 2008 report,' says Peter R. Porrino, Global Director of Insurance in Ernst & Young's Global Insurance Center. 'As insurance companies continue to navigate their way through this downturn, they should be focusing on changing their approach to risk management, regulatory analysis and the communication of risk information.'
The report identifies the top 10 business risks faced by the industry as ranked by more than 100 leading sector analysts. The top ten risks this year are:
1. Financial market crisis: the crisis has severely battered the financial services industry. Even if systemic risk abates, the consequences have been so profound that they are likely to shape the industry for the next decade.
2. Model risk: the failure to recognize the shortcomings of models and to adequately capture the nature of risk have left some companies unprepared for the depth of recent financial events.
3. Regulatory intervention: organizations must prepare for"
4. Managing the non-life underwriting cycle: mismanaging the cycle is arguably the number one cause of insolvency in the non-life insurance industry and the number one contributor to losses in stakeholder value.
5. Geopolitical shocks: greater risk of geopolitical shocks is heightened by the economic slowdown, as falling incomes generate political pressures and collapsing tax revenues threaten governments' capacity to respond.
6. Demographic shifts in core markets: consumer focus on savings products increases the insurance industry's need to strategically manage capital risk, including exposure to equity markets.
7. Emerging markets: while proving to be an area of expansion for large diversified insurers, emerging markets are more susceptible to rapid and unexpected deterioration.
8. Channel distribution: even with current market conditions and an increasing focus on expense reduction, there are still significant opportunities and risks in investing in multi-distribution strategies.
9. Legal risks: unexpected changes in both the forms and sources of liability continue to be one of the greatest challenges facing non-life insurance companies.
10. Climate change and catastrophic events: extreme events are major strategic risks for the industry and have far-reaching implications for insurers paying the price for the escalating costs of rising catastrophic losses.
While much of the downside risk may have already occurred, the current market turbulence still poses an immediate threat. "In this environment, it is essential that insurance companies address product innovation, changing regulation, investment strategies and capital requirements to help retain earning power and maintain agency ratings. This will help to serve as a starting point for discussions among leadership so that their near- and long-term business strategies take these issues into account," Peter Porrino concludes. "While instability still prevails, opportunities abound for those companies that are able to rebuild and strengthen their businesses."
About Ernst & Young's Global Insurance Center
Insurers must increasingly address more complex and converging regulatory issues that challenge their risk management approaches, operations and financial reporting practices. Ernst & Young's Global Insurance Center brings together a worldwide team of professionals to help you achieve your potential - a team with deep technical experience in providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify the implications and develop points of view on relevant industry issues. Ultimately it enables us to help you meet your goals and compete more effectively. It's how Ernst & Young makes a difference.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 135,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.
For more information, please visit http://www.ey.com/ <http://www.ey.com/> .
Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
See Post At Insurance Broadcasting: http://www.insurancebroadcasting.com/insurance-news-062509-1.htm
Read Full Report At E&Y: http://www.ey.com/Publication/vwLUAssets/Second_annual_business_risk_report/$FILE/Industry_Insurance_Second_annual_business_risk_report_2009.pdf
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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Tuesday, June 16, 2009
Conning Research: Property-Casualty Industry 2008 Loss Reserves Remain Strong, but Weaker than 2007
Conning Research: Property-Casualty Industry 2008 Loss Reserves Remain Strong, but Weaker than 2007
Conning Research: Property-Casualty Industry 2008 Loss Reserves Remain Strong, but Weaker than 2007 >
Posted : Tue, 16 Jun 2009 13:03:18 GMT Author : Conning Research & Consulting >
HARTFORD, Conn., June 16 CT-Conning-Research >
- Industry released more than $14 billion from reserves, excluding massive reserve additions to mortgage guarantee lines - double 2007 level >
HARTFORD, Conn., June 16 /PRNewswire/ -- While the property-casualty industry still appears to have sufficient reserves, the overall position deteriorated in 2008, continuing a trend that began in 2007, according to a new study by Conning Research and Consulting. >
"Significant releases occurred in most lines of business, with an average benefit of almost three points in calendar-year loss ratio, compared with what would have been reported had no releases taken place," said Stephan Christiansen, director of research at Conning Research & Consulting. "The most significant releases, in terms of dollars, were in the most recent accident years of liability lines, and in workers' compensation. These lines are the most difficult to assess, and future rates of settlement and claim emergence must be watched closely." >
The Conning Research study, "Property-Casualty Loss Reserves: Once More to the Well," analyzes statutory data from Schedule P as part of Conning's ongoing annual industry review of the property-casualty industry's balance sheet position. >
"Overall, the industry appears to continue to have sufficient reserves under reasonable assumptions of claims settlement patterns," said Christiansen. "Older years (for accident years prior to 1999) continue to develop adversely, but the pace of development has slowed considerably. The older-year reserves have been massively strengthened over the past several years and it is possible that the industry has now caught up to the need in this 'tail' portion of the reserves. However, the remaining reserves specifically set aside for latent claims such as asbestos and environmental liabilities appear thinner than in previous years, relative to recent settlement levels." >
"Property-Casualty Loss Reserves: Once More to the Well" is available for purchase from Conning Research & Consulting, by calling (888) 707-1177 or by visiting the company's web site at http://www.conningresearch.com/. >
About Conning Research & Consulting >
Conning Research & Consulting provides insurance industry analysis to insurers and industry stakeholders. Its published research includes market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. The Conning name has represented excellence in independent insurance industry research for 50 years. Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning is headquartered in Hartford, CT. >
Contact:Anne Steinberg
Kitchen Public Relations, LLC212-687-8999anne@kitchenpr.com >
SOURCE Conning Research & Consulting
Read full posting: http://www.earthtimes.org/articles/show/conning-research-property-casualty-industry-2008,862373.shtml
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Conning Research: Property-Casualty Industry 2008 Loss Reserves Remain Strong, but Weaker than 2007 >
Posted : Tue, 16 Jun 2009 13:03:18 GMT Author : Conning Research & Consulting >
HARTFORD, Conn., June 16 CT-Conning-Research >
- Industry released more than $14 billion from reserves, excluding massive reserve additions to mortgage guarantee lines - double 2007 level >
HARTFORD, Conn., June 16 /PRNewswire/ -- While the property-casualty industry still appears to have sufficient reserves, the overall position deteriorated in 2008, continuing a trend that began in 2007, according to a new study by Conning Research and Consulting. >
"Significant releases occurred in most lines of business, with an average benefit of almost three points in calendar-year loss ratio, compared with what would have been reported had no releases taken place," said Stephan Christiansen, director of research at Conning Research & Consulting. "The most significant releases, in terms of dollars, were in the most recent accident years of liability lines, and in workers' compensation. These lines are the most difficult to assess, and future rates of settlement and claim emergence must be watched closely." >
The Conning Research study, "Property-Casualty Loss Reserves: Once More to the Well," analyzes statutory data from Schedule P as part of Conning's ongoing annual industry review of the property-casualty industry's balance sheet position. >
"Overall, the industry appears to continue to have sufficient reserves under reasonable assumptions of claims settlement patterns," said Christiansen. "Older years (for accident years prior to 1999) continue to develop adversely, but the pace of development has slowed considerably. The older-year reserves have been massively strengthened over the past several years and it is possible that the industry has now caught up to the need in this 'tail' portion of the reserves. However, the remaining reserves specifically set aside for latent claims such as asbestos and environmental liabilities appear thinner than in previous years, relative to recent settlement levels." >
"Property-Casualty Loss Reserves: Once More to the Well" is available for purchase from Conning Research & Consulting, by calling (888) 707-1177 or by visiting the company's web site at http://www.conningresearch.com/. >
About Conning Research & Consulting >
Conning Research & Consulting provides insurance industry analysis to insurers and industry stakeholders. Its published research includes market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. The Conning name has represented excellence in independent insurance industry research for 50 years. Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning is headquartered in Hartford, CT. >
Contact:Anne Steinberg
Kitchen Public Relations, LLC212-687-8999anne@kitchenpr.com >
SOURCE Conning Research & Consulting
Read full posting: http://www.earthtimes.org/articles/show/conning-research-property-casualty-industry-2008,862373.shtml
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Commercial Property & Casualty Insurance Prices Experience Smallest Decline in Four Years, According to Towers Perrin Survey
Commercial Property & Casualty Insurance Prices Experience Smallest Decline in Four Years, According to Towers Perrin Survey
June 15, 2009 09:00 AM Eastern Daylight Time
Commercial Property & Casualty Insurance Prices Experience Smallest Decline in Four Years, According to Towers Perrin Survey
Prices Nearly Flat in First Quarter; Directors and Officers, Property Among Segments Showing Increases
STAMFORD, Conn.--(BUSINESS WIRE)--The smallest decline in commercial property & casualty (P&C) insurance prices in four years – less than 1% – provides increasing evidence that the soft market is reaching its end, according to Towers Perrin’s most recent commercial lines insurance pricing and profitability trends survey (CLIPS).
Prices for property and directors and officers (D&O) liability actually rose – albeit slightly – in the first quarter of 2009. Prices for large accounts – those with annual premiums in excess of $50,000 – also increased during the first quarter. This upturn in prices is not surprising, as large account prices eroded substantially more than middle-market and small accounts in 2007 and 2008. In contrast, small-account commercial prices continued their pattern of steady, but smaller, decreases.
None of the surveyed lines saw a deepening of price reductions from the fourth quarter of 2008 and, for lines where prices fell, all first quarter decreases were in the low single digits.
“Premiums in many lines may be falling faster than prices in some segments of the market – because lower payrolls, receipts, miles driven and other measures of exposures are declining due to the current economic climate,” said Stephen Lowe, Managing Director of Towers Perrin’s global property & casualty insurance consulting practice. “This reduced exposure from economic conditions may account for some of the disparity between the CLIPS survey results and the surveys published by the insurance brokers.
“More qualitatively, anecdotal evidence indicates that property insurance prices are continuing to rise in catastrophe-prone areas and declining slightly in non-catastrophe areas,” added Mr. Lowe. “This trend reflects the continuing high cost of property catastrophe reinsurance.”
Year to date through the first quarter, CLIPS data indicate that accident-year 2009 loss ratios deteriorated 11% relative to 2008. This deterioration comes on top of an estimated deterioration for accident-year 2008 of 9% over 2007. Increases in claim costs and the "earning" of the price decreases taken in the last four quarters both contributed to loss ratio deterioration for 2009.
About CLIPS
CLIPS data are based on both new and renewal business figures – when available – obtained directly from carriers underwriting the business, and indicate more conservative price reductions than other marketplace surveys.
This particular survey compared prices charged on policies underwritten during the first quarter of 2009 to the prices charged for the same coverage during the same quarter in 2008.
CLIPS participants represent a cross section of U.S. property & casualty insurers that include many of both the top 10 commercial lines companies and the top 25 insurance groups in the U.S. CLIPS’ measurement of both pricing changes and loss ratio changes also sets it apart from other studies.
Participation in CLIPS has been increasing, as carriers believe it provides a more accurate picture of price changes and find it useful in setting assumptions for estimates of their claim liabilities.
The survey results track the differing trends in pricing across various regions, lines of business, and account sizes on a quarterly basis. Historically, price level and loss ratio change results vary considerably by line of business and market segment.
About Towers Perrin
Towers Perrin is a global professional services firm that helps organizations improve performance through effective people, risk and financial management. The firm provides innovative solutions in the areas of human capital strategy, program design and management, and in the areas of risk and capital management, insurance and reinsurance intermediary services, and actuarial consulting. Towers Perrin has offices and alliance partners in the United States, Canada, Europe, Asia, Latin America, South Africa, Australia, New Zealand and the Middle East. More information about Towers Perrin is available at http://www.towersperrin.com/.
Contacts
Towers PerrinMichael McNamara, 914-745-4126mailto:914-745-4126michael.mcnamara@towersperrin.com
Permalink: http://www.businesswire.com/news/google/20090615005629/en
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
June 15, 2009 09:00 AM Eastern Daylight Time
Commercial Property & Casualty Insurance Prices Experience Smallest Decline in Four Years, According to Towers Perrin Survey
Prices Nearly Flat in First Quarter; Directors and Officers, Property Among Segments Showing Increases
STAMFORD, Conn.--(BUSINESS WIRE)--The smallest decline in commercial property & casualty (P&C) insurance prices in four years – less than 1% – provides increasing evidence that the soft market is reaching its end, according to Towers Perrin’s most recent commercial lines insurance pricing and profitability trends survey (CLIPS).
Prices for property and directors and officers (D&O) liability actually rose – albeit slightly – in the first quarter of 2009. Prices for large accounts – those with annual premiums in excess of $50,000 – also increased during the first quarter. This upturn in prices is not surprising, as large account prices eroded substantially more than middle-market and small accounts in 2007 and 2008. In contrast, small-account commercial prices continued their pattern of steady, but smaller, decreases.
None of the surveyed lines saw a deepening of price reductions from the fourth quarter of 2008 and, for lines where prices fell, all first quarter decreases were in the low single digits.
“Premiums in many lines may be falling faster than prices in some segments of the market – because lower payrolls, receipts, miles driven and other measures of exposures are declining due to the current economic climate,” said Stephen Lowe, Managing Director of Towers Perrin’s global property & casualty insurance consulting practice. “This reduced exposure from economic conditions may account for some of the disparity between the CLIPS survey results and the surveys published by the insurance brokers.
“More qualitatively, anecdotal evidence indicates that property insurance prices are continuing to rise in catastrophe-prone areas and declining slightly in non-catastrophe areas,” added Mr. Lowe. “This trend reflects the continuing high cost of property catastrophe reinsurance.”
Year to date through the first quarter, CLIPS data indicate that accident-year 2009 loss ratios deteriorated 11% relative to 2008. This deterioration comes on top of an estimated deterioration for accident-year 2008 of 9% over 2007. Increases in claim costs and the "earning" of the price decreases taken in the last four quarters both contributed to loss ratio deterioration for 2009.
About CLIPS
CLIPS data are based on both new and renewal business figures – when available – obtained directly from carriers underwriting the business, and indicate more conservative price reductions than other marketplace surveys.
This particular survey compared prices charged on policies underwritten during the first quarter of 2009 to the prices charged for the same coverage during the same quarter in 2008.
CLIPS participants represent a cross section of U.S. property & casualty insurers that include many of both the top 10 commercial lines companies and the top 25 insurance groups in the U.S. CLIPS’ measurement of both pricing changes and loss ratio changes also sets it apart from other studies.
Participation in CLIPS has been increasing, as carriers believe it provides a more accurate picture of price changes and find it useful in setting assumptions for estimates of their claim liabilities.
The survey results track the differing trends in pricing across various regions, lines of business, and account sizes on a quarterly basis. Historically, price level and loss ratio change results vary considerably by line of business and market segment.
About Towers Perrin
Towers Perrin is a global professional services firm that helps organizations improve performance through effective people, risk and financial management. The firm provides innovative solutions in the areas of human capital strategy, program design and management, and in the areas of risk and capital management, insurance and reinsurance intermediary services, and actuarial consulting. Towers Perrin has offices and alliance partners in the United States, Canada, Europe, Asia, Latin America, South Africa, Australia, New Zealand and the Middle East. More information about Towers Perrin is available at http://www.towersperrin.com/.
Contacts
Towers PerrinMichael McNamara, 914-745-4126mailto:914-745-4126michael.mcnamara@towersperrin.com
Permalink: http://www.businesswire.com/news/google/20090615005629/en
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Wednesday, April 1, 2009
P/C Combined Ratio Sees 10-Point Jump
P/C Combined Ratio Sees 10-Point Jump
Insurance Networking News
P/C Combined Ratio Sees 10-Point Jump
By Pat Speer March 30, 2009
Excerpts:
Although experts say the industry should see a leveling out of combined ratio increases by mid to late 2009, the sting of what occurred in 2008 is being felt industry-wide. The 10-point increase in the property/casualty industry’s combined ratio for 2008 seems yet another indicator of the trickle-down effect of the current economic downslide.
According to an A.M. Best Co. statistical study, the total industry registered a 104.7 combined ratio in 2008, compared with 95.1 in 2007. The combined ratio for the top 25 writers based on net premiums written rose to 102.3 in 2008 from a profitable 94.5 the prior year.
A.M.Best P&C financial analyst Ed Keane, points to catastrophes, losses from mortgage/financial guaranties and a general deterioration in rates. "Cat losses added 5.1 points to the overall combined ratio in 2008," Keane said. "In 2007, cat losses added about 1.5 points."
Overall insured property losses in 2008 were the fourth-highest within the last decade—approximately $25.2 billion, according to ISO's Property Claim Services Unit. A majority of the cat losses were caused by tropical storms and hurricanes—Ike, Gustav, Dolly, Fay, Hanna and Eduoard. Tornadoes and winter storms in the Midwest also added to cat losses in the industry
Read Full Article: http://www.insurancenetworking.com/news/combined_ratio_insurance_property_casualty_catastrophe_mortgage-12089-1.html
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Insurance Networking News
P/C Combined Ratio Sees 10-Point Jump
By Pat Speer March 30, 2009
Excerpts:
Although experts say the industry should see a leveling out of combined ratio increases by mid to late 2009, the sting of what occurred in 2008 is being felt industry-wide. The 10-point increase in the property/casualty industry’s combined ratio for 2008 seems yet another indicator of the trickle-down effect of the current economic downslide.
According to an A.M. Best Co. statistical study, the total industry registered a 104.7 combined ratio in 2008, compared with 95.1 in 2007. The combined ratio for the top 25 writers based on net premiums written rose to 102.3 in 2008 from a profitable 94.5 the prior year.
A.M.Best P&C financial analyst Ed Keane, points to catastrophes, losses from mortgage/financial guaranties and a general deterioration in rates. "Cat losses added 5.1 points to the overall combined ratio in 2008," Keane said. "In 2007, cat losses added about 1.5 points."
Overall insured property losses in 2008 were the fourth-highest within the last decade—approximately $25.2 billion, according to ISO's Property Claim Services Unit. A majority of the cat losses were caused by tropical storms and hurricanes—Ike, Gustav, Dolly, Fay, Hanna and Eduoard. Tornadoes and winter storms in the Midwest also added to cat losses in the industry
Read Full Article: http://www.insurancenetworking.com/news/combined_ratio_insurance_property_casualty_catastrophe_mortgage-12089-1.html
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Thursday, March 26, 2009
J.D. Power Survey: Good Agent Relations Make Insurers Money
J.D. Power Survey: Good Agent Relations Make Insurers Money
National Underwriter
J.D. Power Survey: Good Agent Relations Make Insurers Money
By MARK E. RUQUET
Published 3/25/2009
NU Online News Service, March 25, 3:07 p.m. EDT
The closer a carrier’s relationships with its independent agents, the more business they send its way, according to a J.D. Power and Associates satisfaction survey.
The Westlake Village, Calif.-based information services firm’s findings were contained in its first “2009 Insurance Agency Satisfaction Study.”
J.D. Power said for its report it surveyed 1,589 insurance agents who evaluated more than 10 companies across the industry.
According to the survey findings, the more satisfied an agent is with a carrier, the more premium the producer anticipates placing with that carrier in the future.
Jeremy Bowler, senior director of the insurance practice at J.D. Power, said agent satisfaction is very important because of the influence producers have over consumer-buying decisions.
“If agents are the glue that binds [consumers] to the carrier…then carriers need to do whatever they can [to improve that relationship],” Mr. Bowler said in an interview.
He pointed to an earlier consumer survey released with this report that found 60 percent of customers would renew their business through their agent. However, only 44 percent of consumers said they would definitely renew with an insurer.
An even stronger indicator of customer preference was the finding that 60 percent of customers said they would switch insurers if their agent advised them to do so.
“Companies will be hard pressed to make a loyalty play [to the policyholder] if the agent does not want to stay with the company,” noted Mr. Bowler.
He said the survey revealed that satisfaction has less to do with compensation than service elements.
The key drivers of satisfaction for agents are:
• Thirty-two percent of agents say carrier contacts are the key satisfaction driver.
• Twenty-three percent say policy offerings are their key driver.
• Sixteen percent said it is claims handling.
• Thirteen percent said technology.
• Ten percent said price.
• Five percent said compensation.
Read full article: http://www.property-casualty.com/News/2009/3/Pages/JD-Power-Survey-Good-Agent-Relations-Make-Insurers-Money--.aspx
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
National Underwriter
J.D. Power Survey: Good Agent Relations Make Insurers Money
By MARK E. RUQUET
Published 3/25/2009
NU Online News Service, March 25, 3:07 p.m. EDT
The closer a carrier’s relationships with its independent agents, the more business they send its way, according to a J.D. Power and Associates satisfaction survey.
The Westlake Village, Calif.-based information services firm’s findings were contained in its first “2009 Insurance Agency Satisfaction Study.”
J.D. Power said for its report it surveyed 1,589 insurance agents who evaluated more than 10 companies across the industry.
According to the survey findings, the more satisfied an agent is with a carrier, the more premium the producer anticipates placing with that carrier in the future.
Jeremy Bowler, senior director of the insurance practice at J.D. Power, said agent satisfaction is very important because of the influence producers have over consumer-buying decisions.
“If agents are the glue that binds [consumers] to the carrier…then carriers need to do whatever they can [to improve that relationship],” Mr. Bowler said in an interview.
He pointed to an earlier consumer survey released with this report that found 60 percent of customers would renew their business through their agent. However, only 44 percent of consumers said they would definitely renew with an insurer.
An even stronger indicator of customer preference was the finding that 60 percent of customers said they would switch insurers if their agent advised them to do so.
“Companies will be hard pressed to make a loyalty play [to the policyholder] if the agent does not want to stay with the company,” noted Mr. Bowler.
He said the survey revealed that satisfaction has less to do with compensation than service elements.
The key drivers of satisfaction for agents are:
• Thirty-two percent of agents say carrier contacts are the key satisfaction driver.
• Twenty-three percent say policy offerings are their key driver.
• Sixteen percent said it is claims handling.
• Thirteen percent said technology.
• Ten percent said price.
• Five percent said compensation.
Read full article: http://www.property-casualty.com/News/2009/3/Pages/JD-Power-Survey-Good-Agent-Relations-Make-Insurers-Money--.aspx
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Wednesday, February 18, 2009
An interview with the CEO of a leading Italian design firm - The McKinsey Quarterly - interview CEO Italian design firm - Strategy - Innovation
An interview with the CEO of a leading Italian design firm - The McKinsey Quarterly - interview CEO Italian design firm - Strategy - Innovation
Alberto Alessi, head of his family’s iconic design factory, talks about how to sustain innovation over decades—and why companies should take more risk.
FEBRUARY 2009 • Marla M. Capozzi and Josselyn Simpson
Read full article: http://www.mckinseyquarterly.com/Strategy/Innovation/Cultivating_innovation_an_interview_with_the_CEO_of_a_leading_Italian_design_firm_2299
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Alberto Alessi, head of his family’s iconic design factory, talks about how to sustain innovation over decades—and why companies should take more risk.
FEBRUARY 2009 • Marla M. Capozzi and Josselyn Simpson
Read full article: http://www.mckinseyquarterly.com/Strategy/Innovation/Cultivating_innovation_an_interview_with_the_CEO_of_a_leading_Italian_design_firm_2299
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
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