This post provides insights and opinions gleaned from yesterday’s “unique” rate hearing for Hartford Insurance of the Midwest. It sheds light on issues not discussed at the hearing or, perhaps, even technically relevant to the rate request. These discussions were brought to mind by the expressed need for the request and the rationale given by the Insurance Consumer Advocates office (ICA) for recommending the denial of the request. It was also noteworthy that there was no mention, in Steve Alexander’s presentation (ICA actuary) or elsewhere, of MGA fees or agents’ commissions. [Read more…] about Consumer Advocate Recommends Denial of Hartford’s Rate…Wait Till You Hear Why!
General Property Issues
MORE REGULATION–How’s It Working Out So Far?
A skirmish between industry representative William Stander, Vice President of the Property and Casualty Insurers Association (PCI) and Robert Trigaux, Business Editor for the St. Pete Times, not only exposes a lack of knowledge about Florida’s property crisis, particularly from Trigaux and the media, but a lack of historical perspective that’s partly responsible for its super natural staying power.
Their exchange was sparked by a recent Quinnipiac poll showing 59% of voters want more regulation of property insurance, while only 29% say the state is already doing enough. Trigaux’s points, however, are testament that the media and perhaps some consumer advocates have forgotten history; in essence complaining about the system that they not only reported on, but likely applauded, when Charlie Crist rammed it down lawmakers throats. It is a system of strict regulation, micro-management and prior approval. It is a system that discards sound underwriting and exposure management, relying instead on accusation, government mandate and trial by media. [Read more…] about MORE REGULATION–How’s It Working Out So Far?
Sen Richter’s response to Senator Fasano’s letter requesting a veto of Sb-480
The following letter was received at Johnson Strategies in an email but JS has not verified or confirmed its authenticity with Senator Richters office. Still…it is an accurate critique of Senator Fasanos’ letter to Governor Scott and is reproduced here for that reason.
I recently read Senator Mike Fasano’s op-ed attacking the property insurance reform bill, and I cannot simply watch from the sidelines as a 17-year career politician mischaracterizes and demonizes badly needed public policy reform. There were many false statements surrounding Senate Bill 408 recently published in Tampa and Sarasota-area publications, and I want to follow up by providing factual information regarding this legislation. Let me begin by addressing many of the points Senator Fasano misrepresented.
[Read more…] about Sen Richter’s response to Senator Fasano’s letter requesting a veto of Sb-480
THE REST OF THE STORY
Frankly, Florida’s ailing property market is the result of many underlying causes. You’re familiar with the list and many of the solutions. Some items are subject to debate, particularly when it comes to priorities, but…conspicuous by its absence is hurricanes. Another season has ended bringing us to the five year mark without a wind event of any kind. Yet, loss frequency is up nearly 30%; severity is up 30%; the average loss per policy is up nearly 70%. The results are that we’ve had more rate increases and insolvencies after five years of no storms than we had after two years in which eight hurricanes ravaged our state.
What happened? Why have the losses for such traditionally profitable perils deteriorated so precipitously, and…only in Florida?
To find the answer we must go back to 2005. [Read more…] about THE REST OF THE STORY