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Insurance Journal - A new report from Fitch Ratings backs up what many industry experts have reported—2001 was a bad year for the P/C industry, noting an after-tax loss for the first time in history. Fitch, however, sees improved underwriting performance for 2002. Positively, conditions are set for improved results in 2002 as the pricing environment continues to harden appreciably and policy coverage terms and conditions become more restrictive. Fitch feels that the combination of uncertain investment returns thrown together with the poor operating performance in recent years puts the industry in a 'no choice' position that forces the industry to abandon the unsuccessful pricing and underwriting practices of recent years. Fitch concludes that favorable pricing and underwriting trends will likely need to continue for a number of years in order for the industry to produce an operating result that corresponds to an adequate return on capital.
Tuesday, May 07, 2002
Claims Magazine - A survey released by a claims consulting group indicates insurers may be underestimating how important communication and length of time it takes to complete the claims process are to consumers. The study for Accenture‘s claims solution group based in Murray Hill, N.J., found that 94 percent of all U.S. adults cited quick resolution of an insurance claim as a highly important factor in the claims process, while 74 percent felt the settlement amount was more important. The findings, first made public during the Risk and Insurance Management Society conference in New Orleans this month, were commissioned by Accenture to further correlate what customers felt about the claim‘s process with last year‘s loss-cost study (see NU, May 14, 2001, page 6), said David Hollander, Accenture managing partner in the claims solution group.
Monday, April 29, 2002
Property and - An overwhelming majority of risk managers say claim service plays a significant role in their decisions to buy property/casualty insurance, according to a survey by the Chubb Group of Insurance Cos. The study, released April 15 at the Risk and Insurance Management Society 40th annual conference and exhibition, also found that in the aftermath of Sept. 11, many companies are concerned with the financial strength and long-term viability of their carriers. Nevertheless, Chubb has determined that an insurer‘s financial stability does not guarantee a high level of quality claim services. The survey results demonstrate that price is not the driving factor in selecting an insurance carrier, said Mark Korsgaard, senior vice president and worldwide casualty claim manager for the Warren, N.J.-based insurer.
Thursday, April 18, 2002
National Underwriter - Following over a decade of declines, the price for commercial lines insurance began to increase in 2000. Price increases accelerated with 2001 renewals. Following the horrendous losses to commercial lines insurers as a result of the events of Sept. 11, businesses are expecting even higher rates of increase in 2002. As opposed to prior hard markets, businesses in 2002 have a lot more options to manage exposures than through the pure transfer of risk by insurance. In considering these options, businesses need to assess when the current upturn in pricing will peak, and when pricing will return to rates that clients consider acceptable. As shown in Chart 1, prices for commercial lines insurance began to increase in 2000, following 12 years of decline.
Thursday, March 07, 2002
Insurance Journal - The American Insurance Association (AIA) will urge state insurance legislators to encourage states to allow options for insurers that use aftermarket crash parts and to make strides toward civil justice reform during this weekend‘s National Conference of Insurance Legislators (NCOIL) meeting. AIA will also participate in a credit-based insurance scoring hearing and propose amendments to surplus lines licensing bonds. In addition, Peter Lefkin, senior vice president of government affairs for Fireman‘s Fund and chair of AIA‘s government affairs committee, will discuss the need for a federal backstop for future terrorism-related losses. The NCOIL Property-Casualty Insurance Committee will hold a hearing to consider input on the Certified Aftermarket Crash Parts Model Act, proposed legislation that was adopted by the committee last February.
Wednesday, March 06, 2002
National Underwriter - Five Obstacles To Becoming Customer-Centric: According to Siebel Systems Inc. in San Mateo, Calif., "most organizations approach customers from an ‘inside looking out’ perspective, rather than from the customer’s ‘outside looking in’ perspective." Five major obstacles typically stand in the way of achieving this customer-centric orientation, the company said: • Information silos. Customer data is scattered throughout the organization in discrete areas or "information silos" based on product or line of business. "This gives organizations a highly fragmented and incomplete view of their customers," said Siebel. • Disconnected channels. In many organizations, information channels are not synchronized, which could result in a disjointed and unsatisfying customer experience.
Tuesday, March 05, 2002
Claims Magazine - Much has been made in the press in recent years about the potential impact of an aging population in the U.S. Politicians, columnists, commentators, and pundits have all speculated about the effect of an aging population on Social Security benefits and taxes, the demand for retirement housing, and investment yields and strategies. There has been little comment, however, on the impact of aging on our workforce, especially as it relates to workers’ compensation. Are older workers a liability or an asset? Will our society be burdened by the cost of supporting a large retirement population or will people continue working to much later ages? If they do retire later, will that bring extra costs and burdens to the workers’ compensation system or can any exposures be managed with a reasonable level of workplace customization?
Tuesday, February 26, 2002
National Underwriter - The question of performance-based compensation for adjusters was initially discussed in my column of Sept. 10, 2001. The question arose from a former adjuster, who wrote: "I believe the adjuster has to be free of financial interest in the outcome of a claim or there can be no confidence in the fairness of the system." We concluded that the comment was directed at bonus or incentive compensation, not at merit systems to evaluate insurance company adjusters for regular compensation and pay raises. Two types of performance-based systems were identified--those based on results, and those based on activities.
Monday, February 25, 2002
Insurance Information Institute - Many policyholders have seen the price they pay for auto and homeowners insurance increase over the past year. In 2001, the average cost of insuring cars and homes both rose by six percent nationally. Similar increases are projected for 2002. The increases may have taken some policyholders by surprise given that they came after several years of flat to decreasing prices. While these increases translate into a relatively modest $40 for the average homeowner and $45 per vehicle, many policyholders are understandably concerned about higher insurance costs and have been left wondering why their premium rose and what they can do to keep costs down in the future.
Thursday, February 21, 2002
Claims Magazine - Ready to curl up with a good book? Want to advance your knowledge of risk management? Great! You can kill two birds with one stone (or heavy book). Your author annually ventures a humble (and admittedly subjective) opinion on the best risk management books to come out over the past year. This time is no exception. A drum roll, please, as I open the envelope. And the winners are, in no particular order: The Three Faces of Executive Liability by Richard Clarke, Academy of Producer Insurance Studies, P.O. Box 27027, Austin, TX 78755-2027, 800-526-2777, $25 + $2.50 S&H. The author, an executive with Palmer & Cay in Atlanta, also wrote the excellent 1994 book, Maximizing Coverage — Minimizing Costs. Clarke’s newer book focuses on the exposures, coverages, and risk management aspects of directors and officers, employment practices liability, and fiduciary liability.
Thursday, February 21, 2002
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