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Fitch Ratings says the U.S. property and casualty insurance industry will need to produce a combined ratio of about 95.5% in 2008 in order to meet the goal of an 11% return on surplus.
Fitch made this observation in a report outlining the rating agency's five-factor model for determining return on surplus. The five factors in the forecasting model include:
• combined ratio (underwriting losses + expenses)/net premium;
• investment yield (investment income/invested assets);
• operating leverage (net premium/surplus);
• asset leverage (invested assets/surplus); and
• tax rates (the level at which pre-tax income is taxed).
For the purpose of forecasting into 2008, the ratings agency assumed operating leverage to be 0.8x, asset leverage to be 2.4x and a tax rate at the long-term average effective rate of 23%.
Winifred "Wendy" Baker, who in 1990 became the first woman to lead a reinsurance company, will step down after nine years as president of Lloyd's America Inc. at the end of December 2007, A.M. Best has reported.
Baker managed Lloyd's offices in Montreal, New York, Chicago, Los Angeles, Kentucky and the Virgin Islands.
Baker, who reportedly has stepped down to pursue other interests, has overseen corporate marketing and communications, broker development, distribution and compliance and regulatory issues in the Americas.
A.M. Best notes the United States is Lloyd's largest market, accounting for US$8.5 billion or around 40% of its business in 2004. ?Before joining Lloyd's in 1998, Baker had a long career at Continental Corp., advancing to become president of Continental Re in 1990.
She joined Minet Re North America, New York, as senior vice president in charge of developing new business opportunities for its reinsurance intermediary and retail and wholesale insurance brokerage operations in North America.
A group of 21 U.S. property and casualty reinsurers wrote US$17.9 billion of net premiums during the nine months ended Sept. 30, 2007, compared to US$19.6 billion in net premium written during the same period in 2006, according to an analysis conducted by the Reinsurance Association of America (RAA).
The combined ratio for the group was 94.1%, an improvement over the 95.4% combined ratio reported for the same period last year. The 2007 combined ratio takes into account a 65.6% loss ratio and an expense ratio of 28.5%, according to the RAA.
Gross premiums written totalled US$28 billion for the first nine months of 2007, and direct premiums written amounted to US$2.26 billion.
Swiss Reinsurance America Corp reported the highest gross premiums written, at US$4.1 billion. Second was National Indemnity Company, which reported US$3.3 billion.
Munich Re America Corporation reported the highest direct premiums written in the nine months ended Sept. 30, with US$5.59 million. Odyssey America Re reporting US$4.27 million.
Net underwriting gain was US$1.17 billion total for the first nine months, with nine of the 21 companies reporting a loss.
(Palm Beach, Florida) After rejecting a proposal earlier this year to provide health benefits to the same-sex domestic partners of its employees Palm Beach Community College has decided to offer workers insurance for their pets.
Anyone who works for the college would be able to enroll in the pet insurance plan, through Veterinary Pet Insurance. It would cost employees between $22 and $28 per month for dogs and $15 to $18 per month for cats.
The plan will come into effect on January 8.
More info, click here.
DENVER (AP) - A woman involved in a two-vehicle crash in Denver more than two years ago has gone back to court in an effort to get an insurance company to pay up.
Shantel Gonzales was riding with a friend on Father's Day 2005 when the vehicle in which she was a passenger collided with a truck.
Gonzales was 22 weeks pregnant at the time. Doctors performed an emergency Caesarean section, delivering a boy that Gonzales named Marco. But he was born 3.5 months premature, and lived for just over an hour.
Gonzales sued Shelter Insurance for damages, and a jury last year awarded her $130,000.
The woman's attorney says Shelter hasn't paid that verdict, though it did pay $14,000 toward her medical expenses.
Shelter would not comment.
The trial is expected to last three or four days.
If you have been thinking about getting term life insurance, now's a great time to start shopping because life insurance rates are declining rapidly.
According to the Insurance Information Institute's forecast the cost of term life insurance policies will drop by an estimated four percent in 2007. Term life insurance rates are dropping largely as a result of increased competition among insurance companies.
WASHINGTON — Florida homeowners are one step closer to obtaining available and affordable homeowner’s insurance and ending the ongoing crisis that has plagued the state.
The U.S. House approved legislation Thursday night on a 258-155 vote that aims to stabilize the catastrophe insurance market by expanding private industries’ capacity to cover a natural disaster and help states manage risk.
Under the Homeowner’s Defense Act of 2007, a bill introduced by Reps. Tim Mahoney, D-Palm Beach Gardens, and Ron Klein, D-Boca Raton, a federal program would be created to assist state-sponsored insurance programs on covering losses from natural disasters. The bill would set up a federally funded office where states could go to receive assistance for some of the catastrophe risk they have assumed.
The legislation would allow multiple states to join together to help pay for each other’s disaster costs, a more appetizing role for investors to assume, and then transfer the cost to the private markets through catastrophe bonds and reinsurance contracts.
The recall of a Hong Kong-made Bindeez product this week has prompted calls for a mandatory liability insurance on all imported goods.
Thousands of stores across New Zealand, Australia and North America removed the small beads from their shelves after scientists discovered they contained a chemical that, if swallowed, transformed into the illegal party drug, fantasy.
The New Zealand Manufacturers and Exporters Association says the insurance would ensure all imported goods complied with New Zealand safety standards and would provide local companies with a level playing field when competing with cheaper, and possibly lower quality imports.
Insurance industry payrolls in the United States increased by 1,500 in the month of October, to a new high of 2.367 million, reports A.M. Best Company.
Citing research from the U.S. Bureau of Labour Statistics, A.M. Best reported that average weekly earnings for the industry’s non-supervisory positions rose from US$799.62 to US$850.39 during the period between September 2006 and September 2007.
Insurance carriers’ weekly earnings jumped from $864.49 last year to $902.87 in 2007, but the brokerages and agencies showed the biggest gain, increasing from US$677.93 to U.S. $757.02, A.M. Best reported.
Claims adjusters’ average weekly earnings also saw a significant rise from US$807.75 to US$869.22. At the same time, this sector saw a loss of 1,500 jobs over the time frame.
Reinsurance payrolls, on the other hand, rose by 1,400 jobs (to 30,600) over the year. Over the same period, the reinsurance profession reported a drop in average weekly earnings from US$789.35 to US$768.41.
Property/casualty remained the most highly compensated segment of the industry, with a rise in average earnings from US$906.40 in September 2006 to US$956.81 this September.
One in four Floridians under age 65 have no health insurance, and the number of Floridians of all ages without health coverage has grown by 38 percent over the past eight years, to 3.8 million.
More than 75 adjusters from a north Phoenix insurance firm have gone to southern California to help assess the damage from last week's wildfires.
USAA is a firm that provides insurance to people with ties to the military. In an area of San Diego where many such residents live, USAA has set out to help the rebuilding begin.
SHIP agents are increasingly faced with attempts to obtain delivery of cargo using forged emails, according to the International Transport Intermediaries Club (ITIC).
"Fraud in shipping is endemic, cargoes are valuable, and it has never been easier to forge documents, electronic communications, bills of lading, etc,” the ITIC notes in a statement. “Carriers and their agents must continuously be aware of this fact and take whatever steps are necessary to avoid becoming unnecessarily involved in costly claims for damages which have resulted from a failure to be careful and vigilant.”
A major factor leading to claims by principals against their agents is the misrelease of valuable cargo, ITIC says. Carelessness in dealing with telex release — the release of cargo at one port when the bill of lading is surrendered at another (and is almost always done by email) —has contributed to these losses.
ITIC notes two problems with telex release: they are often worded in a careless manner, and are subject to email fraud.
Manipulated emails are received by discharge port agents that authorize the release of cargo. The e-mails confirm freight has been received, when in fact it has not been.
ITIC advises agents asked to perform a telex release to first obtain written authority from their principal. It also cautions that telex releases must never be accepted at face value.
It is huge cost to California Insurer in history.
Please be noted the following quotes.
Of the 23 fires, the Witch Fire in San Diego has caused the most property damage so far and is likely to result in insured losses of US$600 million to US$1 billion
The fires have burned more than 465,000 acres of land and destroyed more than 1,600 structures since Oct. 21. More than 27,000 buildings remain under threat, and nearly 1 million people have been forced from their homes, making it the largest ever evacuation in California and the biggest in the United States since Katrina.
This image, captured by a NASA satellite on Tuesday, Oct. 23, 2007, shows smoke coming off the numerous wildfires from Santa Barbara,.Calif., stretching into Mexico, spreading over the Pacific Ocean. Walls of wind-whipped flames consumed hundreds of homes across tinder-dry Southern California on Tuesday, raising the number of people forced to flee the flames into the thousands.
Volunteer firefighters from Running Springs try to halt the spead of flames in Green Valley Lake, a community about 12 miles east of Lake Arrowhead. (Robert Gauthier / Los Angeles Times / October 22, 2007)
There are two news from fire in California.
Fires could alter Calif. insurance landscape
Some insurance company stop writing new homeowner policy in California.
It will be seen that the premium of homeowner policies will hike.
Regulator says insurers can bring in out-of-state adjusters to help
There is not enough adjusters in state for this big fire losses.
It is such a serious case. More than 1000 jobs are lost.
Some of the firm's 500,000 private and corporate policyholders have been given a total of £357m from the Financial Services Authority's compensation scheme since the collapse.
Cell phones are using so often and popularly. Even my 12 years old nephew has a Nokia cellphone.
I a always has concern about the hearing damage from cell phone. Especially some young guys like to use the earphone for a long time and listen to the music, MP3 hours and hours.
Lloyd's preparing for personal injury related to cell phone use.
Lloyd’s says the number of reports on mobile telecommunications and its impact on health is “immense,” and “the study findings are often conflicting.”
Jon Upshall, the director of casualty broking for Aon Global, which specializes on the telecom and media sectors, added: “There is ongoing debate as to whether there is a causational link between EMF emissions and leukemia, with the present weight of scientific evidence suggesting there is no correlation.”
Liberty – State Police have arrested a 51-year-old North Branch man on a charge of insurance fraud.
State Police and the state Insurance Frauds Bureau conducted an investigation involving false information provided to an insurance company by Edward Lama.
Police said Lama owns and operates two businesses in Brooklyn, yet he obtained insurance coverage for his vehicles by listing an address in the Town of Callicoon as the business location.
The phony business addresses defrauded the insurance company out of mover $3,000, authorities said.
Lama was arraigned and committed to the Sullivan County Jail on $3,000 bail.
Auto insurance rates in North Carolina rank sixth-lowest among all states, one rung down from fifth-lowest previously, according to the latest nationwide data.
For more information, click here.
It can keep increase for now; agency vows to pursue battle on other fronts.
Now Allstats can increase the rate.
I don't think the department should get involve into the rate. Let business as business.
IMO, if the rate is too high, the homeowner will shop around to find another insurance company. If the margin profit is very high, more investors will join in insurance industry. It will be more competition when more competitors. Then the rate will drop at that time.
The department just need to rule that all major changes of insurance coverage, rates, conditions favored to Insurer should notice to insured and give them enough time to consider and/or find a replacement.
In the recent poll managed by Survey and Policy Research Institute at San Jose State University, 52 percent of voters would approve one-cent sales tax increase to help fund health insurance, while 38 percent would vote against it.
It will helpful to improve health benefit for California residents.
That might bode well for Gov. Arnold Schwarzenegger - if he decides to ask voters for such an increase to help pay for universal health care.
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