IRMI Update—Issue #148
An E-mail Newsletter for Risk and
Insurance Professionals
ISSN: 1530-7948
November 8, 2006
In This Issue
Colleague,
A few years ago we published a reference manual covering the
intricacies of insurance rating and premium determination in California:
Levine
on California Workers Compensation and Insurance. Authored
and updated by California attorney and workers compensation consultant
Art Levine, it is a very thorough treatment of the practical, technical,
and legal issues specifically affecting California workers compensation
premiums.
We are making the print version of
Levine
on California Workers Compensation and Insurance available
for only $59 until December 15 (a $181 discount). Learn more about
or order the manual here.
Due to a dramatic recovery by the California workers compensation
marketplace, accompanied by substantial rate reductions, this fine
manual has not sold as well as we expected. Unfortunately, economic
realities have necessitated a decision to discontinue updating it.
Nevertheless, much of the information it contains will be useful
to California agents, brokers, underwriters, premium auditors, and
risk managers for some time to come, and this special price makes
it a great value for your bookshelf.
On another note, have you recommended IRMI Update to a friend
or colleague lately? Our subscriber family has not grown much recently,
hovering around 31,500 risk professionals. I would sure appreciate
your help growing it to 32,000 by the end of the year. Please send
this issue to two people with a recommendation that they sign up.
Thank you so much for your friendship and help.
Have a great day.
Jack
Jack P. Gibson, CPCU, CRIS, ARM
President
IRMI
Assemble the Data for Proof of Loss Documentation—Everyone
has a file cabinet full of information about their business, but
do you (or your clients) really have the data necessary to prepare
a proof of loss? Food for thought: what are the serial numbers,
model numbers, dates of purchase, cost, and description of everything
that keeps the business functioning? In case of fire, flood, burglary,
or disaster, this information will be needed to process a claim.
Is your business (or you or your clients) ready?
By Jan Hayner
Organizing Your Life the Easy Way
Sheboygan, WI
www.organizingandcleaning.com/
Suggest a Risk
Tip. Send us a practical tip (less than 300 words) for
identifying and managing risks, buying insurance, managing claims,
or filling gaps in insurance coverages.
Submit your tips.
We'll acknowledge your contribution as we did for Jan.
We have recently updated a number of the reference manuals in
the IRMI library and published new issues of
The Risk Report and
Captive Insurance Company Reports.
To make sure you don't miss any of this new information take 30
seconds to scan the "What's New" summary page.
For IRMI Online and Print
Subscribers
For
SilverPlume Sage subscribers
There are now over 800 risk management and insurance articles
on IRMI.com. Below you'll find summaries of some recent additions
with links to the articles.
There are almost 40 handouts from the 26th IRMI Construction
Risk Conference available for free downloading. If you missed the
Conference this year, this is the best way to experience all the
educational benefits offered by almost 60 speakers in 29 workshops.
Included is the text from
Joe Plummeri's keynote address. If you were there, you can complete
your workbook with the handouts from workshops you weren't able
to attend. See a
list of topics.
"Ethics for Property and Casualty Insurance Professionals" is
one of our many online insurance CE courses. Passing the course
will not only give you 4-6 hours CE credit, depending on your state,
but also meet your state's ethics course requirement. And you won't
believe how reasonable the cost of these courses is.
Check all the courses
out.
In the
last edition
of IRMI Update, Editor Jack Gibson asked readers for their assessment
of the current insurance marketplace. While overall the situation
appears to have improved, certain pockets remain problematic. See
some of the reader responses below.
-
I have seen continued softening in the workers
compensation, auto, and general liability arenas.
The professional lines have also been soft to stable.
The underwriters are still under pressure to accurately
underwrite the exposures on property risks and much
of this is due to changes in reinsurance treaties.
I have seen new markets come forward, however, and
some increased interest in creative ways to properly
cover property exposures over the past couple of
months. I have also noticed quite a bit of movement
from one company to another by many underwriters
which has created an appetite for new business.
As we move forward, I don't feel that you will see
the carriers loosen their underwriting guidelines
on property exposures, as companies are not willing
to risk a major loss. We will continue to see carriers
quote with loss limitations for major events and
add higher deductibles where they can.
—Bill Horner, Producer,
Bowen, Miclette & Britt, Inc., Houston, TX
-
I write from what is considered a "coastal" area.
For lines other than property, I agree that the
market is aggressive but rational, with aggressiveness
bordering on exuberance. But I'm still at a loss
as to the property market. I've seen property as
far as 150 miles inland from the Gulf of Mexico
described (and underwritten) as "wind exposed."
I can assure you property less distance than that
from the Atlantic and Pacific Oceans aren't similarly
described.
Additionally, I'm curious as to why the property
markets have not attacked their real concern—tropical
systems. We've seen "wind and hail" deductibles
rather than named storm deductibles. How do you
explain to an insured that as an industry we know
what we're doing when we take such a broad approach?
Why should an insured located in central Louisiana,
Mississippi, or Alabama be faced with a percentage
wind deductible for nontropical storm claims when
insureds in Little Rock or St. Louis pay a flat
dollar deductible for the same type of claim? If
we were serious about matching the cure with the
disease, we would have "named storm" deductibles.
To be fair, there are a few companies using these,
but in limited instances. Insureds understand the
problem. But they feel we're taking too broad an
approach.
—Dick Speyrer, Manager,
Wright
& Percy Insurance, Baton Rouge, LA
-
Here in the Midwest, I think we've already returned
to the soft market. I'm seeing underwriters quote
$50,000-$100,000 risks without company loss runs.
I'm seeing some 25 percent schedule credits on new
workers compensation policies. Too bad the stock
market is doing so well. As a 100 percent commissioned
non-owner producer, I love the stock market when
it's on the downturn!
—Larry Jansen, CPCU, CIC,
Producer,
PJC Insurance, Springfield, MO
-
Currently, the market in the greater Chicago/Midwest
area seems to be holding at about 6-10 percent lower
than last year—reasonable for now. The industry
is not run by "reasonableness," as we all know,
market share and greed are our general hallmarks,
so we should all be realists and expect that sometime
in 2007 the price slashing mode for greater market
share will surely set in. Sounds pessimistic, I'm
sure, but after 30 years of cycles, why should this
period be any different? We never learn from history.
—Tom Davis, President,
Davis-American,
Ltd., Oak Brook, IL
-
Casualty lines remain very competitive with average
rate decreases of 5-15 percent. Non-cat property
extremely competitive as carriers seek to write
more non-cat and competition is fierce. Cat exposed
property remains costly with a limited number of
lead markets to access for capacity.
—Robert Bookhammer, Vice
President,
Wachovia Insurance Services, Inc., Dallas, TX
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