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Act II of ObamaCare — A Look at the Upcoming Year

Posted By PIA Western Alliance, Tuesday, October 7, 2014

The consulting company the Segal Group took a look at what employers can expect from the Affordable Care Act in 2015. Here are the conclusions of the Segal Groups 18th annual Health Plan Cost Trend Survey:

  Cost increases for group and pre-Medicare retiree coverage will be between 6.2% and 10.4% depending on the type of plan.

  Prescription cost coverages will be higher by an average of 8.6%

  Last year it was 6.3%.

Edward Kaplan who runs the firms health practices said, New specialty drugs coming onto the market and price increases for brand-name drugs are the main forces driving prescription drug plan cost trends. Typically, less than 1% of all prescriptions are specialty drug medications, yet these drugs now account for more than 25% of total prescription drug cost trends. The projected specialty drug/biotech trend rate for 2015 is an exceptionally high 19.4%.

These are the trends Segal listed in the report. They are for 2015 and are compared to 2014:

  20152014

Preferred Provider Organizations

7.8%
7.9%

Point of Service

7.5%8.4%

Health Management Organizations

6.2% 7.2%

High Deductible Health Plans

8.3%
7.9%

Fee-for-Service/Indemnity Plans

10.4%10.4%

Prescription Drug Carve-Out

8.6%6.3%

Caps for out-of-pocket expenses says the Segal report will drive the medical benefit costs up 1% and prescription drug coverage costs by 1.5%.

 

Source: Businessinsurance.com

Tags:  Healthcare  HealthCare.gov  Insurance Industry  ObamaCare  The Affordable Care Act  Weekly Industry News 

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Rate Trends — Surplus Lines Rates Slowing, Too

Posted By PIA Western Alliance, Tuesday, October 7, 2014

For the last couple of years insurance rates have been rising. The industry has dragged itself in an odd way, some say out of the soft market. Some like MarketScout went so far as to declare the soft market history.

And to a certain extent that may be true. Traditional insurance watchers and economists say thats not the case, but whatever the case, rates rose and after a long soft market, it was welcome.

Now rates are slowing for P&C lines and personal lines. Thats not the case for excess and surplus lines. Or so says the Moodys Investors Service report the U.S. Excess and Surplus Sector Profile. Both are seeing growth and strong profitability. Moodys said the reason is because of a limited appetite on risks that have kept prices adequate.

Moodys emphasized that as capacity and competition increase P&C rates will continue to drop. Prices will rise for excess and surplus lines but like its cousins on the casualty side of things at a slower rate.

A.M. Best came to the same conclusion. In a Best Special Report, the ratings firm said relatively few casualty claims in 2013 helped increase profitability for excess and surplus lines. Underwriting was more profitable and investment gains rose.

Best says the market is stable. However, profits are anticipated to fall as competition grows.

 

Source: Insurancejournal.com

Tags:  Insurance Industry  P&C Lines  Personal Lines  Profit  Weekly Industry News 

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Montana’s Insurance Industry has Oldest Workers

Posted By PIA Western Alliance, Tuesday, October 7, 2014

The oldest workers in the nation are in the PIA Western Alliance state of Montana. In 2013 the 483,000 working in Montana over 40,000 were 65 and older. Thats 8.3% of the workforce. Nationwide the average is almost 5%. So Montana touches on a little over 3% higher than the rest of the country.

Why older workers are still working in Montana and elsewhere is a complex question. The short answer is loss of retirement investments and retirement income from the recession is generally listed as the top reason.

The stats come from the Bureau of Labor Statistics who tracks such things. Since 2010 the number working age 65 and over has jumped considerably. Those with the oldest workers have seen an increase of 1% on average. Wyoming had the biggest rise and went to 7.12% from 4.31%.

Here is the list of the top-10 states with the oldest workers. Two PIA Western Alliance states Montana as just mentioned and New Mexico are on that list:

   Montana 8.3%

   Wyoming 7.12%

   Nebraska 7.1%

   South Dakota 7.1%

   Vermont 6.39%

   New Jersey 6.39%

   New Mexico 6.37%

   Delaware 6.37%

   Rhode Island 6.36%

   Oklahoma 6.36%

 

Source: Insurance Business America

Tags:  Employment  Insurance Industry  Weekly Industry News 

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