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Special Report: Relationship — Carriers & Independent Insurance Agents

Posted By Administration, Tuesday, October 11, 2016

PIA Connecticut, New Hampshire, New Jersey, New York put out a report last week on the relationship between carriers and independent insurance agents. It checked in with 700 agents in the four states and with 74 companies and gathered more 2,500 comments on the strength of carriers and how they can improve their performance.


The scores went from 0 to 10 with 10 being the highest:


  Ranking 1st at an 8.1 is underwriter knowledge and experience

  Consistent underwriting at 7.8 is tied for second with prompt claims payment

  Honest and clear communication was third at 7.4


PIACT President Loretta Lesko said, “This is the fifth consecutive time 'underwriter knowledge, experience’ has been the highest-scoring performance item on the Company Performance Survey. It makes sense, since underwriters have the most interaction with agents.”


What agents don’t like — according to the survey — is carrier technology. PIANY President John Parsons II said, “From the findings of the survey, it appears that carriers are not embracing the newest technology. However, even as agents lament their carriers’ technology, national carriers score at the top in the technology categories.”


Agents also listed the items companies do that are most important to them:


  Fair claims adjustment

  Prompt pay

  Fast issue resolution

  Clear, honest communication

  Underwriter knowledge and experience

  Listening skills and response to agents

  Consistent underwriting

  Easy, intuitive technology


  Flexibility when warranted


Carrier scores improved for the first time since 2010. The PIA chapters take it as meaning the carriers are starting to value what agents are saying. Agents — the report says — are seeing improvement.


PIANH President John Obrey said, “In addition to the increase in overall scores, agents continue to speak positively about their carriers. Of the nearly 2,500 comments provided by the agents who took the survey, 54 percent of them focused on a company’s strength.”


A report released by Channel Harvest in August also noted that 90% of agents think carrier technology is critical. But just 70% ranked carrier technology as above average.


Channel Harvest Principal Peter van Aartrijk said, Agents will have their favorite carriers — and love them, warts and all. In some ways, you can still be ranked as an overall so-so carrier in a number of areas, but in a basket of so-so or lousy carriers, you might not actually look that bad. It sounds harsh, but I think agents will put up with a lot in exchange for a consistent market, decent prices and products, and okay service.”


IVANS Insurance Solutions pointed to the technology numbers in both surveys and with the PIA survey IVANS said technology is the worst-performing area among the carriers. And agents want and expect more from insurers when it comes to downloading and other technology.


IVANS VP and general manager Thad Bauer said there are 1.8 million download connections available in the marketplace. That means there are thousands of opportunities to download multiple lines of insurance coming to the agency management system. These include possible business on commercial and personal lines and ACORD eDocs and messages.


What IVANS found in its research is 94% of agencies are using some type of downloading processing technology. Yet, 59% of the available connections aren’t yet activated by those same agencies.


When you think about information sharing in the electronic age, it’s obvious that there is a good return on investment for any form of automation — but that’s particularly true for download. In many agencies, there are people whose sole job is to log in to several different carrier portals, retrieve key policy information, and pass it along to the consumer. Now there’s no need for that, and no costs associated with making download connections. If an agency has an agency management system, they’ve already invested,” Bauer said.


Going the other way, agents are frustrated by sending applications to carriers and having them declined. Many will send submissions just to find 60% of them declined. That’s a costly expense for an agency. And it has led to many agencies making agreements with carriers to only send them certain types of business if the carrier will guarantee approval.


So new business that doesn’t fit those parameters is turned away.


Source links: PIA.org, two links from Insurance Business America — link 1 and link 2



Tags:  Insurance Content  Insurance Industry  Insurance News  Special Report: Relationship — Carriers & Independ  Weekly Industry News 

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Update: Greenberg Leaves Stand in AIG Fraud Trial

Posted By Administration, Tuesday, October 11, 2016

Maurice “Hank” Greenberg


We continue with our coverage of the book cooking trial of AIG founder and former CEO Maurice “Hank” Greenberg for two reasons. The first is to see through to the end a story Weekly Industry News has been following for nine years.


The second reason is this case and others brought on by then New York Attorney General Eliot Spitzer — then known as the Sheriff of Wall Street — radically changed the face of insurance. Spitzer’s campaign against insurance — among other things — attacked contingency commissions and how Marsh & McLennan and other insurers practiced them.


PIA National successfully battled on your behalf on that issue.


Greenberg also successfully sued the U.S. government for taking over AIG during its near collapse and won. He didn’t win any compensation but won the case nonetheless.


What makes Greenberg most interesting as an insurance leader — or destroyer depending on how you view him — is his resilience. He’s 91 years young and continues to battle to clear his name and has spent more money than most of us would make in 10 lifetimes to do so.


During the nine years between Spitzer’s original accusations and this trial, Greenberg battled in this court and that and managed to whittle them down from nine to six. So now he and his former CFO Howard Smith are being tried — finally — for the 2005 accusations.


This is about two transactions in 2000 where Spitzer said Greenberg and Smith tried to hide the company’s real fiscal health. The alleged doings in this trial and other charges also got Greenberg kicked out of his own company. While he remains AIG’s largest stockholder, Greenberg no longer wields power.


Last week after four and a half days of intensive questioning, Greenberg finally left the stand.


Under questioning by his council David Boies, Greenberg said he did nothing wrong. During the four days he continually said he can’t remember the details of every AIG transaction since he visited 30 countries in a typical year and spent each day reading several hundred pages of documents and participating in 70 telephone calls and a bunch of meetings. 


At one point, Greenberg told the judge he was just too busy to commit fraud.


Source link: Insurance Business America



Tags:  Insurance Content  Insurance Industry  Insurance News  Update: Greenberg Leaves Stand in AIG Fraud Trial  Weekly Industry News 

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A Long Hard Week for ObamaCare

Posted By Administration, Tuesday, October 11, 2016

Democratic nominee Hilary Clinton has defended the Affordable Care Act. Clinton contends she likes ObamaCare but has called for some changes. Ironically, while she expresses support, husband and former president Bill Clinton doesn’t view the law as being all that hot.


And comments to that effect have landed him in hot water with his wife’s campaign and with Democratic leadership. No word could be found on Mrs. Clinton’s comments to Mr. Clinton on Mr. Clinton’s gaff.


But one can probably accurately surmise that she probably wasn’t all that happy.


Here’s what happened. At a rally last week in Flint, Michigan, the former president attacked ObamaCare and its flaws and called it “the craziest thing in the world.”


While the criticism may have surprised his wife, it didn’t surprise a lot of those in the know. Clinton was very critical of President Obama and the administration when it didn’t keep its promise to let people keep the doctors they’d been using before the law was enacted.


That was then. This is now. Last week he said ObamaCare is plain not working for a lot of people. You’ve got this crazy system where all the sudden 25 million more people have healthcare and then the people are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half,” Clinton said.


He criticized the double-digit premium increases and the departure of insurers from the ObamaCare exchanges by noting it only works “fine” for those who get the ObamaCare subsidies or who are already participating in Medicaid or Medicare.


The people who are getting killed in this deal are small business people and individuals who make just a little bit too much to get any of these subsidies,” he said and pointed out a good solution is to let people get their insurance via Medicaid or Medicare.


Interpretation: Clinton likes the public option which is a government run insurance company to compete with insurers.


Angel Urena — a Bill Clinton spokesman — defended the former president’s tirade and said his comments were taken out of context. He said, President Clinton spoke about the importance of the Affordable Care Act and the good it has done to expand coverage for millions of Americans. And while he was slightly short-handed, it's clear to everyone, including President Obama, that improvements are needed.” 


White House spokesman Josh Earnest also jumped in and said, It’s not exactly clear to me exactly what argument he [Clinton] was making. And then he went on to list all of the Affordable Care Act’s compliments.


Earnest ended with he and the president wish Clinton had not used the word “crazy” to define ObamaCare’s flaws, I think what I would say is the president is quite proud of the accomplishments of the Affordable Care Act. The American people benefit from the way the law has been implemented.”


Clinton also appeared to get the message. In a different speech later in the day, Clinton tried to make amends and pushed — as his wife, President Obama and 33 U.S. senators led by a bill introduced by Oregon Democrat Sen. Jeff Merkley have — for the government option. The change we need is not to wreck this thing and repeal it. It’s done too much good. The change we need is to create an affordable option for the small-business people and the working people who are not covered — that’s what the public option is about,” he said.


The Trump campaign was immediately all over Clinton’s comments. Spokesman Jason Miller said, With premiums continuing to skyrocket, state insurance markets collapsing and businesses struggling to comply with its job-killing mandates, even Democrats like Bill Clinton are coming to realize just what bad public policy ObamaCare really is.”


Hilary Clinton’s campaign also had an immediate response and pointed out even President Obama has been critical of the law in recent weeks and said it needs tweaking.


Once all the shouting subsided what all agreed on — Democrats and Republicans — is that something has to change. Both parties agree health insurance plans for many people are too expensive and growing more so every day.


All this has reignited the never-quite-squashed debate over passing the Affordable Care Act in the first place. Among the law’s defenders and public option backers is Richard Kirsch who led a grassroots effort to get it passed. He said, Supporters of the public option warned that private insurance companies could not be trusted to provide reliable coverage or control costs. The shrinking number of health insurers is proof that these warnings were spot on.”


The insurer association America’s Health Insurance Plans (AHIP) says the public option would not stabilize the exchanges. It would — in fact — do the opposite. AHIP has enacted a grassroots push of its members urging them to contact members of Congress to warn of the impending doom of such a move.


Tennessee Republican Lamar Alexander who chairs the Senate Health Committee agrees. Obamacare exchanges are collapsing because of federal mandates and a lack of flexibility. We need to give states more flexibility and individuals more choices so more people can buy low-cost insurance,” he said.


But can ObamaCare do that? The Affordable Care Act statistics say 80% of those signing up are below the 150% of the poverty level. Just 17% of those enrolled are three to four times more than the poverty level at $35,000 or so to $47,000 a year.


Sara Rosenbaum — who is a professor of health law and policy at George Washington University — put it in perspective and said the solutions are obvious. Even the most ardent proponents of the law would say that it has structural and technical problems that need to be addressed. The subsidies were not generous enough. The penalties for not getting insurance were not stiff enough. And we don’t have enough young healthy people in the exchanges.”


President Obama agrees and last week ripped into Congress and its constant gridlock for not fixing the program’s real problems.


They’re eminently fixable problems in terms of strengthening the marketplace, improving the subsidies so more folks can get it, making sure everybody has Medicaid who was qualified under the original legislation, doing more on the cost containment. But you hit a point where if Congress just is not willing to make any constructive modifications and it’s all political football, then you’re getting a sub-optimal solution,” Obama said.


Source links: The Hill, The New York Times, Insurance Business America



Tags:  A Long Hard Week for ObamaCare  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  The Affordable Care Act  Weekly Industry News 

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Underwriting — $1.5 Billion Loss 1st Half 2016

Posted By Administration, Tuesday, October 11, 2016

It’s the first loss in three-years. Or so says the annual half-year analysis done by ISO — a Verisk Analytics business — and the Property Casualty Insurers Association of America (PCI).


Here’s some of what the report found about the first half of 2016:


  The net underwriting decline was $1.5 billion

  Net income after taxes fell to $21.7 billion

  It was $31 billion in the first half of 2015

  The combined ratio fell to 99.8% from 97.6% in 2015

  Net written premium growth dropped to 3% from 4.1% a year earlier

  Net investment income fell to $22.1 billion

  That’s down from $23.5 billion in the first half of 2015

  Realized capital gains fell from $8.1 billion to $4.4 billion

  That resulted in $26.5 billion in net investment gains — a drop of $5.1 billion

  Catastrophe losses were $13.5 billion — up from $10.8 billion

  It’s also above the $11.6 billion 10-year average


Beth Fitzgerald of ISO Solutions said, With interest rates and investment yields remaining low, insurers must find ways to improve operational efficiency while still providing valuable coverage for their policyholders.”


PCI senior vice president Robert Gordon found one of the biggest problems in the report to be personal lines. The underperformance of auto insurance continues to drag down industry underwriting results. Industry statistics we’re monitoring indicate that direct personal and commercial auto liability losses each spiked over 11 percent from the first half of 2015, significantly outstripping premium growth. The increases were a significant contributor to the worsening combined ratio, with personal lines insurers deteriorating from 100.0 to 103.1, and commercial lines insurers from 94.6 to 96.0. As a result, while overall industry surplus rose slightly to a record high, once adjusted for inflation, real surplus actually declined and insurers’ return on average surplus dropped below the long-term average,” he said.


Dr. Steven Weisbart — the Insurance Information Institute’s chief economist — said the report really isn’t that bad because comparing the second period of 2015 to that of 2016 really isn’t fair. That is because the first half of 2015 was an unusually strong period for the property/casualty industry, presenting a high hurdle for any subsequent period’s performance,” he said.


Weisbart agreed the report was difficult but he said the industry is still quite strong. Two reasons:


  The Policyholders surplus is at a new all-time high

  Premium growth has experienced the longest sustained growth period in the last decade


The bottom line is that the industry is, and will remain, extremely well capitalized and financially prepared to pay very large scale losses in 2016 and beyond,” Weisbart said.


Source links: Insurance Journal, Insurance Business America



Tags:  Insurance Content  Insurance Industry  Insurance News  Underwriting — $1.5 Billion Loss 1st Half 2016  Weekly Industry News 

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New Rules Trouble Insurers with Fiduciary Products

Posted By Administration, Tuesday, October 11, 2016

The new fiduciary standard rule issued by the Department of Labor is causing some consternation in insurance circles. It’s being phased in and will go into effect in April of next year. The rule says agents and advisors must act within the best interest of their clients when selling investment products for a fee or commission.


It affects Best Interest Contracts (BIC). Nationwide, Allstate and USAA are going to continue to sell those commission-based annuities and mutual funds. State Farm is not and sent such notice to its 12,000 agents with licenses to sell securities.


The rule is quite unpopular and nine groups — including the U.S. Chamber of Commerce — have filed suit and want the rule tossed out. The suit was filed in Texas and experts say a ruling could come down this month.


The National Association of Fixed Annuities (NAFA) also filed suit in Washington D.C. The judge involved declined to make a decision and said NAFA didn’t meet the threshold needed to stop the implementation of the rule.


State Farm’s PR director Phil supple said starting next April its agents will sell or service mutual funds, variable products and tax qualified bank deposit products through a call center and not via agents.


Authorized agents will — however — continue to sell fixed annuities.


Both USAA and Allstate issued statements. USAA said, We are committed to adhering to regulatory requirements and to ensuring our members receive the financial products, services, advice and solutions they expect and deserve.”


Allstate said, Many middle-market customers rely on Allstate for access to life and retirement products. We are committed to providing the products that our customers expect from Allstate agencies and financial professionals as we adapt to the Department of Labor fiduciary rule scheduled to begin taking effect in April 2017.”


Source link: PropertyCasualty360.com



Tags:  Insurance Content  Insurance Industry  Insurance News  New Rules Trouble Insurers with Fiduciary Products 

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Aftermath — Hurricane Matthew & Explanations

Posted By Administration, Tuesday, October 11, 2016


Hurricane Matthew is the first category 5 storm to hit the Atlantic Ocean in nine years. It is no longer a threat to land. At the time this is written the hurricane is just a tropical storm. At its peak it was a category 5 storm and caused incredible damage as it wound down from a 5 to a 3 as it hit the coast of Florida.


CoreLogic said 1.5 billion residential and commercial properties were damaged by the hurricane and we’ll see $4 billion to $6 billion in insured-property loss.


A cat 5 hurricane is a very serious storm. Winds hit 157 mph or more. Worse, the storm surge can be 18 feet or higher. Extensive damage will be done to homes and businesses and smaller buildings will be completely blown away. Lower floors in buildings 500 meters or less from a shore will sustain significant water damage.


After being a category 5, Matthew slowed to a category 4 with winds running from 130 mph to 156 mph. The storm surge for a category 4 is 13 to 18 feet. Like a category 5, damage will be done to buildings and trees and signs will be blown down, rooftops blown away, etc.


Then Hurricane Matthew became a category 3. Wind at 111 mph to 129 mph doesn’t do as much damage as a 4 or 5 but it is still significant as is the 9 to 12 feet storm surge. Trees, mobile homes, roofs, etc. can be damaged.


Category 2 winds will be 96 mph to 110 mph and the storm surge will run six to eight feet.


Category 1 hurricanes have winds 74 mph to 95 mph. The storm surge is four to five feet.


Source link: PropertyCasualty360.com



Tags:  Aftermath — Hurricane Matthew & Explanations  Hurricane  Insurance Content  Insurance Industry  Insurance News  Natural Disaster  Weekly Industry News 

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, October 11, 2016

California — Early Earthquake Warning System

 California Governor Jerry Brown has said yes to legislation to develop a statewide earthquake warning system. The bill adds more money to the $10 million approved earlier.


The goal of the warning system — now called ShakeAlert — will be to provide real-time earthquake information to cellphones, radios and other devices within the next year.


The Governor’s Office of Emergency Services Mark Ghilarducci said, After the quake hits and the shaking stops, we want our citizens to bounce back, to survive. But we also want our businesses to recover rapidly. We honestly believe by implementing this it will help in that endeavor.”


Plans are to connect this with other systems to its neighbor states to the north, Oregon and Washington.


Source link: Insurance Journal



California — Kemper Controversy

 California Insurance Commissioner Dave Jones issued the following statement regarding Kemper's Corporation's announcement that they are beginning to search for beneficiaries of life insurance proceeds:


"Kemper's announcement that they are 'voluntarily undertaking a comprehensive process under which it will cross-reference its life insurance policies against the Social Security Death Master File and other databases to identify beneficiaries that may not have filed a claim following a loved one's death is too little too late and falls woefully short of Kemper's legal obligation to identify potential beneficiaries that may be unaware they are due life insurance benefits.


Kemper cites new technology and resources that make the searches for current policies possible, but the reality is the technology has existed for decades and Kemper continues to fight conducting retrospective searches for beneficiaries. Rather than having sought consensus in the regulatory community, Kemper has sued several insurance commissioners leading a national investigation of Kemper and lobbied in state legislatures to block the passage of new laws, which reiterate the obligations of life insurers to use the Death Master File (DMF) to search for beneficiaries of deceased life insurance policyholders.


Twenty-four other major life insurers have agreed to do the right thing by searching for possible beneficiaries on all existing policies and policies that lapsed due to non-payment because the insured was already deceased. Three other insurers were determined to be in compliance with fair claims settlement laws by searching the DMF for deceased policyholders from the moment they began to use the DMF. These insurers have done the right thing and delivered on the promises they made to their policyholders to be there for the loved ones named on life insurance policies.


Contrary to the other 27 major insurers, Kemper has fought at every turn its obligation to use the Death Master File to search for beneficiaries. Kemper needs to step up and do the right thing. They should cease to litigate this issue, agree to search all of their policy records, and disclose their procedures and records to regulators."



Idaho — Notice of Rule 18-01-48

 Effective September 1, 2016, insurers and producers are no longer obligated to send their customers an annual privacy notice where the licensee’s practices and policies regarding disclosure have not changed since the last notice sent to their customer. The rulemaking will also benefit consumers by relieving them from receiving duplicate annual notices.


For more information click this link: http://www.doi.idaho.gov/publicinformation/laws/Rulemaking.aspx   



New Mexico — Insurer Back Taxes

New Mexico is going after back taxes insurers — via an oversight by two clerks — owe the state. The state wants the money now but Insurance Superintendent John Franchini is asking for more time.


At issue is $193 million in unpaid taxes on insurance premiums.


Franchini said the office will be fully staffed within the next month and he wants two more months after that to collect the money from close to 2,000 insurance companies.


Source link: Insurance Journal



Washington — From the Office of the Insurance Commissioner

 We adopted Allowing insurers to pay claims settlements rule, effective October 30, 2016 (R 2016-12). The rule will amend WAC 284-30-330(16) to add electronic payments as a way insurers can pay claim settlements.



Tags:  Around the PIA Western Alliance States  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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PIA & NAIC — Defending U.S. State Insurance Regulation

Posted By Administration, Tuesday, October 4, 2016

Congress is now looking at international insurance regulations. The U.S. House Financial Services insurance subcommittee recently held a hearing focused on U.S. engagement on insurance issues with the European Union (EU).


National Association of Insurance Commissioners (NAIC) Vice President and Tennessee Insurance Commissioner Julie Mix McPeak testified at the hearing and urged Congress to proceed with caution.


PIA supports a modernized state-based insurance system and opposes any federal regulation or — in this case — international standards that will destabilize or supplant state-based regulations. And that means making sure the Federal Insurance Office (FIO) and the Financial Stability Oversight Council (FSOC) do not encroach on state based insurance regulation or placing an undue burden on independent agents.


And when it comes to international standard setting developments, trade negotiations, and FIO efforts on certain international agreements, the PIA wants to ensure there is no negative impact on state insurance regulation from them. 


The NAIC is of the same mind when it comes to international regulations being applied in this country. McPeak told the subcommittee, “After more than a decade of dialogue and information exchange, the EU has all the information it needs to recognize the U.S. insurance regulatory system and avoid future regulatory retaliation. Instead of negotiating a potentially preemptive agreement behind closed doors to solve a problem of the EU's creation, we encourage our federal colleagues to push back on the EU and urge them to reconsider their laws before agreeing to preempt ours.”


She was accompanied by NAIC President and Missouri Insurance Director John Huff. He acknowledged the leadership of Subcommittee Chairman Republican Rep. Blaine Luetkemeyer of Missouri and of Ranking Member Democrat Rep. Emanuel Cleaver, also of Missouri. And then he said, “In an environment of ever-increasing regulatory demands, it is imperative we are careful not to add an additional layer of regulatory burden for insurers in the U.S. or in Europe, an unnecessary burden that will ultimately be borne by consumers.”


At issue is the marketplace dynamics in the United States and the European Union as Europe transitions to Solvency II. Negotiations at this point involve reinsurance collateral.


“We urge Treasury and USTR to take preemption of state insurance consumer protections and any expansion of the federal government's role in insurance regulation off the table. State legislatures and Congress should decide the specifics of U.S. insurance regulatory power and who shall exercise it — not federal bureaucrats, and certainly not the EU,” she said.



Tags:  Insurance Content  Insurance Industry  Insurance News  PIA & NAIC — Defending U.S. State Insurance Regula  Weekly Industry News 

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California and Oregon Shaking — Earthquakes

Posted By Administration, Tuesday, October 4, 2016

The ground is shaking in Northern California, Southern California and Southern Oregon. For the last couple of weeks earthquakes — some say as many as 140 — have rattled Southern California. They’re not very powerful but the fact that they hit in swarms has officials paying attention.


In Northern California — actually along its border with Oregon — a 4.6 quake hit about 100 miles off the coast of Brookings, Oregon and a 5.0 shook things 100 miles off the coast of Gold Beach, Oregon. The first was 6.2 miles below the ocean floor and the second was 10 miles.


In Oregon interest in earthquakes is heating up and anything 5.0 magnitude or over starts talk about the Cascadia Subduction Zone. It is the fault that runs just off the coast of the Pacific Northwest and it is way overdue for a massive quake. The last shake was at about 9pm on January 26, 1700. It was — scientists say — a magnitude of 8 to 9.


Huge by any standards. The Japan quake in 2011 was a 9 and it moved the nation’s coast by eight feet and shifted the Earth on its axis. Click here to watch a video produced by Oregon Public Broadcasting (OPB) that explains the damage that can be done by an earthquake of 9.0 in magnitude.


And what you hear from these same scientists is how unprepared the citizens of Oregon and Washington are for such an event. If — or should we say when? — the subduction zone lets loose, Portland, Seattle and cities in between will be devastated. Homes and buildings will be totally destroyed, fires will be a serious concern as water and other services will be cut off. Food will be scarce and rescue will be slow.


The most pessimistic forecasts have the Oregon coast moving from where it is now to Portland which is 60-miles inland. So it behooves people to be ready. OPB — where we got this story — also has a video outlining how to prepare.


Click here for a view.


California is also overdue for a major earthquake along the San Andreas Fault. Worse, most Californians live within 30 miles of a fault that is active. All this earthquake attention has Californians concerned and the California Earthquake Authority (CEA) said people are taking it seriously for a change.


CEA insurers most of the state’s residences and it reports 29,000 new policies issued in the first eight months of 2016. But even adding all those new policyholders to the over 900,000 mix means little. The state’s homeowners that have earthquake insurance still sits at about 10%.


CEA’s Glenn Pomeroy says the good news is the 29,000 is twice what was done in 2015. CEA is on a mission to help more Californians insure their homes before the next damaging earthquake strikes. This year we are seeing a huge leap forward in policy sales, as we rolled out great new options to financially protect a home through earthquake insurance — so important in our state, with such a high earthquake risk,” he said.


Meanwhile, a bill has been introduced in the U.S. House on earthquakes. It’s H.R. 5610, The Earthquake Mitigation Tax Incentive Act of 2016 and was introduced by Rep. Mike Thompson of California’s 5th district.


Property Casualty Insurers Association of America’s (PCI) Nat Wienecke is the organization’s senior vice president of federal government relations. He likes the idea. It gives tax incentives to people participating in qualified earthquake loss mitigation programs and says it will encourage homeowners to take relatively low-cost retrofitting measures now in order to reduce the possibility of significant earthquake damage in the future.”


This means a reduction in the amount of federal assistance needed after an earthquake. Reducing the severity of property damage caused by earthquakes should be a priority for federal, state and local government as well as for private industry. PCI urges support for The Earthquake Mitigation Incentive Act,” Wienecke said.


Source links: OPB, CNBC, Insurance Journal




Tags:  California and Oregon Shaking — Earthquakes  Earthquake  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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The Business of Business — Commercial Lines Looking Good

Posted By Administration, Tuesday, October 4, 2016

A.M. Best posted some interesting insurance growth facts last week and it is good news for most of the members of the PIA Western Alliance. The report is called Mutual / Property / Casualty Insurers Managing Market Challenges. It appears that small commercial markets are growing faster than personal lines.


The reason? Carriers are working overtime to remain competitive. Here are some statistics from the report:


  Net written premiums for mutual insurer commercial lines are up 28% since 2011.

  Personal lines are up 15% over the same time frame.

  Personal lines accounted for 66% of total net premiums written as of 2015.

  Personal lines is still the most insurance written but it’s down from 68% in 2011.

  Rapid growth in commercial lines is the reason.


In its comment on the statistics, A.M. Best said, Gradual shifting away from personal lines goes hand in hand with the product line diversification that has been demonstrated by the rated mutual companies.”


And A.M. Best said mutual company diversification has produced excellent results that led to a combined ratio of 103.5 in 2015 and a loss ratio of 58.6. From 2014 through 2015 it’s a much better operating performance than what was seen from 2011 to 2014.


One troubling fact from the data is the expense of underwriting is up and that led to companies compressing underwriting. However, loss ratios that are steady and positives in net investment income offset that and boosted profits. And — even better — the diversification in lines of insurance has reduced what A.M. Best calls the concentration of risk.


The report also said the P&C mutual insurance sector grew 3.1% in 2015 and the compound average rate has grown 3.4% since 2010.


Lastly, that the 10 largest mutual companies are doing 70% of the net written premiums in 2015 has stabilized things. State Farm is the top insurer at 41% of the market and Nationwide has 13%.


Source link: Carrier Management



Tags:  Insurance Content  Insurance Industry  Insurance News  The Business of Business — Commercial Lines Lookin  Weekly Industry News 

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