National Underwriter - The workers‘ compensation insurance market continues to face challenges following further deterioration in underwriting performance in 2001, according to a new report by Chicago-based Fitch Ratings. Despite significant pricing improvements in most states, the workers‘ comp combined ratio increased to 121 in 2001, from 118 in 2000, representing the sixth-consecutive year of deteriorating underwriting performance. "The unexpected losses related to the events of Sept. 11 were a contributing factor behind the poor performance," said James B. Auden, senior director at Fitch Ratings. "However, the key factor continues to be that workers‘ compensation pricing marketwide was inadequate from the late 1990s through 2001, despite a recent trend of rate increases."
Wednesday, August 07, 2002
Insurance Journal - Insurers are expected to pay $1.97 billion to homeowners and businesses for insured-property losses from 10 catastrophe events in the second quarter of this year, according to preliminary estimates by the Insurance Services Office Inc.'s (ISO) Property Claim Services (PCS) unit. Except for the late-June Arizona wild land fire, all second-quarter events were caused by the wind, hail, tornadoes and flooding that accompanied strong thunderstorms. A severe weather system, between April 27 and May 3, created the largest catastrophe of the quarter and nearly half the total loss for the period. These storms produced nearly 250,000 claims in 17 states, with a total insured loss estimated at $855 million.
Sunday, July 28, 2002
Insurance Journal - The two Texas gubernatorial candidates continue to trade barbs over the state's tumultuous homeowners insurance market, further proving that higher premiums have become a major issue in the campaign. According to the Dallas Morning News, Democratic candidate Tony Sanchez has increased calls for a special session of the Texas Legislature to address the issue, with Republican governor Rick Perry continuing to dismiss the appeal as unnecessary. During a five-stop bus tour through East Texas, Sanchez asserted that Perry' s refusal to call a special session is proof of his ties to the insurance industry, which has donated nearly $900,000 to the governor's campaigns in the last five years.
Tuesday, July 23, 2002
Insurance Journal - Farm Bureau Mutual Insurance Company announced that the Farm Bureau property-casualty affiliates in Kansas (Farm Bureau Mutual Insurance Company, Inc.) and Nebraska (Farm Bureau Insurance Company of Nebraska) will merge into Farm Bureau Mutual Insurance Company. The Farm Bureau Mutual property-casualty pool currently operates predominantly in Iowa, Minnesota, South Dakota, Utah, Arizona and New Mexico. These three mutual companies have signed a memorandum of understanding to merge operations and are working toward finalizing a definitive agreement. This merger is contingent upon regulatory approval and is expected to close during the first quarter of 2003. "Our policyholders will benefit from improved rate stability as we achieve greater geographic diversification by moving from a one-state to an eight-state environment," John Tatum, executive vice president and general manager
Monday, July 08, 2002
Claims Magazine - In almost every writing skills seminar, there comes a moment in which a participant finds that one of the notions about writing that he or she has held since elementary school is either no longer valid or is dead wrong. Many teachers, in an attempt to standardize communication in English, codify their opinions as “rules.” These “rules” are really guidelines that must occasionally yield to give flexibility to our efforts to express ourselves. Although we cannot communicate without at least some understanding of the rules, we also need to be flexible about applying them. We need to leave room for creativity as long as the goal of communication can still be achieved. Here are 10 rules that claim people must break occasionally to give their communications the suppleness and effectiveness they demand:
Tuesday, June 25, 2002
Claims Magazine - Virtually every property and casualty company has a claim audit process. In some cases, there is an internal unit, either full- or part-time, assigned to the task. In others, the audit function is managed by TPAs or consultants. Regardless of whether claim functions are reviewed in hard copy, electronically, on- or off-site or both, I have not yet seen or been involved in any program in which the company gets full value for the time and money it expends. Lets start with the word audit. It is a negative word, especially to the auditee, and some companies will avoid its use at all costs, on the theory that if you call it quality control or performance management, the process will be more palatable and positive.
Friday, June 14, 2002
Insurance Journal - Rising household water damage claims have cost California insurers billions of dollars and are constricting the homeowners insurance market, according to a study done by the Insurance Information Network of California. The losses have increased dramatically in each of the past five years, the new study of the P/C industry found. "Water represents a disproportionate share of the claims payments made on homeowners insurance policies," Candysse Miller, executive director of the IINC, commented. "The cost of these claims is helping to fuel a homeowners insurance crunch as insurers struggle to keep these skyrocketing costs under control." Though the number of water-related claimsor insurance losses for damage caused by burst hoses and pipes or leaks from washing machines, icemaker connections, lavatories and other household water fittingshas varied from year-to-year,
Wednesday, June 05, 2002
Insurance Journal - NCCI Holdings, Inc., delivered its "State of the Workers Compensation Insurance Line" presentation to an estimated 500 insurance executives at the NCCI Annual Issues Symposium (AIS) in Orlando, Fla., claiming the state of the workers' comp market remains tough with early 2001 results indicating one of the year's worst performances in the market's history. NCCI reported a combined ratio of 121 percent for the 2001 workers' compensation insurance calendar year. With a gain of 3 points from the 2000 combined ratio of 118 percent, this year's results mark the sixth straight year of falling combined ratios. During the mid-1990s, the combined ratio for workers compensation hovered around 100 (1994-1997), which is considered excellent for a long-tailed line like workers compensation.
Monday, May 13, 2002
Insurance Journal - Illinois Insurance Director Nat Shapo announced that the Cook County Circuit Court issued an Order of Liquidation against Western Specialty Insurance Company of Oak Brook, Ill., on May 6, following a determination by the Department of Insurance that the company's surplus was impaired by an amount in excess of $1 million, and at the request of the company's board of directors. Western Specialty is a wholly owned subsidiary of Western Holdings Incorporated. The company was originally incorporated in April 1986 as Oak Brook Property and Casualty Insurance Company, a wholly owned subsidiary of First Oak Brook Corporation Syndicate, which was placed into liquidation in 1996. The current name was adopted upon the sale of a majority interest in the company to current ownership in 1996.
Friday, May 10, 2002
Claims Magazine - There is a direct correlation between using authoritative language in claims communication and the smooth, speedy resolution of claims. If you use wishy-washy phrases in your writing, you come across as unsure, and that forms a cloud of suspicion and uncertainty over the whole claims process. While it is proper to admit not being sure of a fact, some claims people get carried away with the use of “weasel words,” sprinkling them liberally throughout letters to claimants, attorneys, physicians, and commissioners. As I review writing samples from participants in my claims writing seminars, I see the same hedgy language from Maine to Maui. Here are six common examples of hedging: 1 “Soon” (also “ASAP,” “at your earliest convenience.”) — Use “at your earliest convenience” or “soon” only when you dont really care exactly when you need to receive something from your correspondent.
Wednesday, May 08, 2002