the news release on this you would know that it deals with contingency boneses paid by insurors to the large national brokers. This practice has been going on since time in memorial and is based upon a premium # less losses. Since ALL doesn't write commercial or surety or deal with the large national brokers it doesn't apply to them. Time for you to go back up on your roof and watch the weather.
I recall your prior posts pointing out that insurance companies don't trade on weather events. I have to admit this perspective seems pretty much correct. I shorted ALL when ivan was still forming, seeing no reason ALL should be near all-time highs with major earnings damage on the way. It all came true: big storms, big damage, big earnings hit, and ALL looks pretty resilient.
How many megatons of energy in 4 hurricanes? And now, a little hot air from Spitzer has been enough to turn my modest short position profitable in a small way. I'll gladly cover my mistake in the chaos and confusion this morn and ponder the lessons...
trade on weather events in fact the last few years they did seem to do so. This year was different and they didn't seem to trade on them. The perception seems to be that these events can effect one quarter but in the long run they may have a benefit that offsets the immediate loss. The perceived benefits are higher rates and reunderwriting in particularly loss prone areas. Insurance isn't the most exciting area in the world but investing in the large P & C companies can be very profitable if you enter at the bottom point of the cycle. (Hint I think we are 85% of the way to the top of the cycle). HAGD
the practices permeates all kinds off insurance writing. For example; ALL did not want to write my home owners Ins. but they're allowed to find one for me. They present a selection of polices and recommend the supposedly cheapest one. Unbeknown to me they left out the one policy which was the least expensive and pushed the other policy on me as the best so they can get a their kick back. So you see this "clues person " knows that all the major INs. co.'s are implicated.