National Underwriter - Because an individual's credit is "very personal in nature," the use of that information is "an issue fraught with a lot of misunderstanding," observed Roger H. Schmelzer, vice president, regulatory affairs for the National Association of Mutual Insurance Companies. "That makes it dangerous as people get emotional about things," he added. David F. Snyder, assistant general counsel for the American Insurance Association in Washington, stated that although insurers use credit information in vastly different ways, the AIA hopes that the National Association of Insurance Commissioners Market Conduct and Consumer Affairs "D" Committee will consider only whether any additional legislation or regulation is necessary on credit scoring.
Sunday, February 03, 2002
Insurance Journal - According to a Business Wire report, insurers will have to strengthen their loss reserves in order to be able to meet future claims, as stated in a new Conning & Company study. Though property-casualty rates have been growing in the recent past, reserves are not at the necessary levels to cover the rising costs of claims. According to the study, eight of the nine property casualty lines are severely deficient with a total reserve deficiency of $16 billion - money desperately needed to catch up to claims made between 1998-2000. In addition, the recently acknowledged recession and the events of Sept. 11 will further pressure insurers ability to return to profitability. The study claims that individual insurers, however, appear to be slow to take action when having to deal with the need to strengthen their loss reserves.
Thursday, January 31, 2002
Insurance Journal - Results released from Weiss Ratings Inc.indicate that, even with a recession, only 40 insurance companies failed in 2001, a modest 5 percent gain over the 38 failures recorded in 2000. However, according to a Business Wire report, property and casualty insurers represented a disproportionate 34 of the 40 insurance company failures, with the Reliance Groups insolvency alone representing 12 of the property/casualty company failures. Conversely, the number of HMO failures dropped for the second straight year, falling 58 percent to 8 in 2001, from 19 in 2000. Among the 48 insurance companies and HMOs that did not survive in 2001, Weiss had handed out financial safety ratings on 36, with 92 percent of those given weak or lower ratings. The leftover 8 percent had been given a fair rating.
Tuesday, January 29, 2002
National Underwriter - In a wakeup call for commercial insurance buyers, risk managers and other business executives were warned by one top brokerage to expect sharp increases in their insurance premiums and maybe less coverage for the price. Chicago-based Aon brought its seminar series, entitled "The New World of Risk," to New York City with that clear, unhappy message for clients. For now and the foreseeable future, rates will be substantially rising throughout the property and liability lines, ranging from a low of 20 percent to as much as 600 percent on some lines and particular risks, Aon managers said. The sharp hikes are being prompted by a combination of the terrorist attack of Sept. 11, years of unprofitable underwriting and declining capacity in some lines of business, Aon explained.
Monday, January 28, 2002
National Underwriter - The many myths that have sprung up about the insurance industrys ability to handle claims stemming from the Sept. 11 collapse of the World Trade Center have to be dispelled, cautioned Robert Hartwig, chief economist and vice president of the Insurance Information Institute in New York. Very shortly after the terrorist attacks on the United States, insurance regulators and others went to great lengths to assure legislators and the public that the insurance industry was well-capitalized to pay the resulting claims, Mr. Hartwig noted in a speech here during the annual meeting of the American Institute of Marine Underwriters. However, Mr. Hartwig also observed that many misleading numbers have been and continue to be thrown around by people who lack a real understanding of the industry's finances.
Monday, January 21, 2002
National Underwriter - Prediction: 2002 will be better than 2001 for insurers. With a combined ratio this year expected to top 120, virtually no profits, record underwriting and catastrophe losses, declining investment income, shrinking capacity and a recession underway, this is an easy prediction to make. Its hard to imagine how things could get any worse. Even in the event of another major terrorist attack next year, the much-ballyhooed federal reinsurance backstop should cap the industrys liability at about $10 billion. Insurers are headed in the right direction for 2002. Caution is the industrys new watchword. Rates, retentions and limits are up, and the Feds are expected to come to the rescue. But higher prices, limits on exposure and a government backstop are not enough.
Wednesday, January 16, 2002
National Underwriter - Honest communication and remaining the advocate for the customer are the best ways for producers to handle any conflict between clients with claims against insurers, independent agents suggest. The primary role of any independent agent, they said, is to make sure the customer is being treated fairly by the insurer. However, it is equally important, agents contend, to make sure the agency maintains its reputation for integrity with its carriers. "We do not walk much of a tightrope," explained Karen Oxman, vice president of Gelfand Newman Wasserman in Los Angeles. "There are times where we may disagree with the company, but my goal is that if the insurance company is being unfair to my client it is taken care of. I dont think [that thinking] jeopardizes my relationship with the carrier."
Monday, January 07, 2002
National Underwriter - The U.S. General Accounting Office is conducting a study of the terrorism reinsurance market, the National Underwriter has learned. Industry sources said they have been contacted by the Chicago office of GAO, which is seeking information on the impact of the absence of terrorism reinsurance coverage in preparation for a House Financial Services Committee hearing, which is expected to take place shortly after Congress reconvenes on Jan. 23. The study was reportedly requested by the Financial Services Committee. The GAO study comes in the wake of the failure of the U.S. Senate to pass legislation creating a federal backup mechanism for the terrorism reinsurance market prior to Jan. 1, 2002, renewals.
Thursday, January 03, 2002
National Underwriter - The U.S. Supreme Court is being asked to jump into a legal fight over a demand by a group of claims adjusters for overtime pay, which led to a $90 million jury award, an insurers attorney said. The case could trigger even more class-action lawsuits against insurers, in the opinion of Ellis J. Horvitz, founding partner of Horvitz & Levy, the Encino, Calif., law firm representing Farmers Insurance Exchange in the case. The verdict in Bell v. Farmers Insurance Exchange came down in July after a trial in an Alameda County, Calif., court. Previously, in March, a state Court of Appeal had ruled that the trial court did not err in finding in a summary judgment motion that the 2,400 plaintiff claim representatives were not exempt from overtime pay under state labor laws.
Thursday, January 03, 2002
Insurance Journal - The Council of Insurance Agents + Brokers released findings from a special benchmarking survey of The Councils members. The special survey builds on The Councils quarterly Commercial Insurance Market Index by establishing a benchmark for assessing the impact of the World Trade Center attacks on Jan. 1 renewals and the future market. Given major fluidity in the commercial insurance market in the wake of the Sept. 11 attacks, The Council compared the commercial property/casualty insurance market today with market conditions as they were one year ago. In addition, The Council focused on changes in use of alternative market mechanisms in order to meet commercial insurance consumers needs.
Sunday, December 30, 2001