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Meadowbrook Insurance Group Inc. Message Board

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  • Reply to

    AmTrust?

    by hearnthar Sep 15, 2014 9:31 PM

    Given the premium they paid over what SinkHole was really worth, there is no reason to think that they would not overpay for this turd as well. However, the NY sanctions imposed, requiring AFSI to hire a chief actuary and bulk up their actuarial staff, plus submit to increased audit oversight, could slow up AFSI's acquisitiveness.

  • A rumor out there is the Karfunkels are looking to purchase MIG, now that they finished the deal on the falling Tower. I am sure they would not be paying a premium for it, though.

  • Reply to

    its time

    by myword2967 Aug 5, 2014 12:24 PM

    Good luck. I would not go quite that far. Tower was, in my opinion was so clueless that they did not even know what they were writing and it took them months and months to figure out their claims reserves and even then were wrong--and still don't have it right. Meradowbrook is clueless regaring what makes a good account and how to do claims, but they are not as far over the edge as Tower was. While I think, unless there is a stupid company that comes in to rescue (Tower-ACP idiots), there is about a 75% chance Meadowbrook will not survive. My investment strategy is only invest in long term positive plays (mostly because I don't get the short term well enough to win). I also follow closely property casualty insurers for interest because I do think I understand those. To reiterate, I would be extremely surprised if, in the long term this survives without being purchased (some have already turned it down), but I don't know how long it might take. Many times insurers can hide for awhile before the stuff hits the fan.

  • Reply to

    its time

    by myword2967 Aug 5, 2014 12:24 PM

    I think they are the next Tower! Been shorting.

  • Reply to

    its time

    by myword2967 Aug 5, 2014 12:24 PM

    A long tail Insurance company that is shrinking after having to put up tons of reserves will have negative cash flow. What is impressive is the tail is not so massive, they do not have to continually add to the reserves and still have the ability to "manage" their results. Right now, I am comparing to the most recent diarrhea episode, (Tower Group) so I might be jaded. (also some past companies that I am also familiar with in the last cycle (Fremont, Cal Comp, etc.) TWGP could not put off the "surprise" to another time. I do think that Meadowbrook is managing their reserves right now, but within a margin of error, so perhaps the tail can be dissipated over time and the company can survive. I don't know when Meadowbrook gets truly independent actuaries to look at ultimate claims without rose colored glasses, but they are not required to do so until the annual statutory report (and final annual GAAP), so we still do not know how far off they are. I believe they are trying to stretch this out as long as possible in order to hide past addl losses in current year's profits--as the market improves.
    Having said that, Meadowbrook is not exactly notorious for writing good quality workers compensation business. Their pricing has improved, but they are allowing very suspect wholesalers to pick and price their business (I could name a wholesaler in the Sacramento area who has fooled at least 5 insurance companies, including the largest players, prior to moving the book to Meadowbrook). So while things temporarily look better and more stable, I think they will not survive the second tail slap. So, long term, I would not be on this stock, though they may be able to make it look stable for at least through next March and perhaps another year before it hits the fan.

  • Reply to

    its time

    by myword2967 Aug 5, 2014 12:24 PM

    You are impressed by the negative cash flow, are you? I laugh whenever I read the glowing reports about "accident year loss ratio." The accident year loss ratio is nothing more than management's pick on what it wants the loss ratio to be, adjusted in subsequent years for the reality of reserve development. Current underwriting results are meaningless -- look at the cash flows.

  • Reply to

    its time

    by myword2967 Aug 5, 2014 12:24 PM

    I don't know about that, but I am impressed. Perhaps they are turning the corner. Of course the big question is how under reserved they still are.

  • to start buying.

  • Reply to

    you can't go wrong with this

    by myword2967 May 24, 2014 7:32 AM

    If they report about break even profit/loss it is a really good clue that they are "managing" the reserves and their loss, if accurately reported as ultimate is a lot more than reported. They just cannot afford to be downgraded anymore if they are to recover in a few years.

MIG
6.060.00(0.00%)Sep 19 4:04 PMEDT

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