The state fund is not immune to the same costs.
As a matter of fact, all insurance companies participate in the state fund. Yes, it's still us.
The policy is issued by a "fronting" company only. Then all premium and claims are divided up between all of US, on a percentage basis (percentage of what each one of us insures in the voluntary market).
The state funds have been losing $$$$ also. Historicaly, their rates are always higher than the voluntary market. As in most businesses, we react quicker to events than the goverment. Give them some time, their rates will be 150% higher than ours...
Pay your Premium On time! Have a Nice Day.
No offense taken... I understand the biz end of insurance and the shared risk concept. But when claims barely exceed premiums and will not by timeof next premium pmt, I smell a play for a higher rate...oh, well, there's always the state fund...kad
No offense, but, our biz is just like yours...
At the end of the year, we add up all the dollars we brought in and how much we paid out.
If we paid more than we brought in, we gotta raise the BASE PRICE to everyone. Those with bad claims ratios, get raised more, those that are good get raised less, but, the overall basic level of rates must be increased.
Because, if we pay out a $1 Million dollar claim, where do we get the money from...yes, your right again, it's you.
Of course we can't raise someones rate from $2,000 per year for insurance to $1,000,000. We'd never collect, and besides, your not gonna have a $1 Mill claim every year.....but someone else will!
Speaking of my GA policy, I got a non-renewal notice Tuesday from Erie... I got to get busy and find a replacement. Erie is making noises like they'll put me into another type GA policy--for more bucks, or course...and me, a 10-yr customer with only 3 claims in 10 yrs...
I know it's all business...bastards...lol..jad
Oh, BTW I followed you on meaning of run off.
"run off" is non renewing insurance policies that you wrote over the past year.
Another words, your contractors GL policy renews in June, you will be notified 60 days prior that we do not intend to renew it. We will be "Runing Off" (non renewing) all Contractors General Liability Policies begining 1/03, with the final policy expiring on 12/31/03.
It means we chase off a whole book of business, or a certain line of coverage
In TWKS case, they are not going to offer insurance renwals on Trucks (Long haul, Gravel, Tow trucks etc), Taxi Cabs (geesh), Directors & Officers Coverage, nor any other half priced freeby, let me subsidize your business insurance policies)/
Problem is, it takes a whole year, non renewing crap, 1/12th of the business at a time, like a slow bleed over 12 months, cause you can't raise the price you gave it last year.
You must be out here on the "Other coast", it's only 8:30 here...
From what I can gather, most is in airline planes n things. The other stuff is a small 1-3% line slip. I think they only had, like, 1.5% of the 9/11 coverage. So, not big bites.
Lost some pretty big dollars on oil platforms in South Amirica.
Going Forward, their still heavy into the airlines. They have a covenant from LOC providers; No D & O, E & O. Must be Enron & Worldcom scares.
Gotta go Asta Lavista baby...
Any idea as to how much they retain on the Oil and high valued property biz? EIL? The windstorm peril can be a killer particularly if you write a ton of coastal property on the early layers. What type of high valued property? Hotels? Office Buildings?
The current LlOYDS book has been reunderwritten. (Mostly airlines, offshore platforms and high limit property). Warren Buffet's stuck his foot up their ass and said, YOU WILL CHARGE XXX OR DON'T DO IT!
Chubb, same deal, they get a 5% front fee and re insurance participation. All New Biz, effective 1/03.
I think they will probably turn 15-25%, assuming no CAT losses. On their book, they've turned profits as high as 50% with no big bad hurricanes.
On $500 Mill in prem., this gives them plenty of money to pay for thier capital.
The difference from BK and an $8 dollar stock is.......
How Much are you Under Reserved. $10 Mil...$100 Mil....$200 Mil? Thats where we are at today!
$200 Mill would probably get them siezed. $75 Mil, hmmm, $4 stock price if thats all there is there. More in 04.