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
Easy Organizing
Sheboygan, WI
Easy_organizing@yahoo.com
www.organizingyourlifetheeasyway.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
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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
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