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Mercury General Corporation Message Board

  • knowinsurance knowinsurance May 23, 2005 5:21 PM Flag


    Why would Mercury pay AIS contingency commissions if Mercury was the lowest auto insurance seller. After all doesn't AIS advertise it will shop around for its auto insurance clients and find the "lowest insurance". If Mercury was the lowest - why pay AIS . . . why not keep the money if your already the lowest . . . someone must have the answer?

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    • Finite Reinsurance

      A type of reinsurance that transfers over only a finite or limited amount of risk. Risk is reduced through accounting or financial methods, along with the actual transfer of economic risk. By transferring less risk to the reinsurer, the insurer receives coverage on its potential claims at a lower cost than traditional reinsurance.

      For example, an insurer will set aside an amount to cover a percentage of the payouts if the risk is realized. Only when the amount does not cover the payouts will the reinsurer cover the risk. This limits the potential risk that the reinsurer faces and leads to lower costs for the insurer. The amount set aside is usually invested in government bonds and provides income that is put against potential claims. Due to the highly complex structure of these risk instruments, there can be abuses where no risk is transferred and the insurer's income is improved.


      I've got some little blue pills to sell you too, "Honest" Ted.

    • It's been enjoyable watching you get spanked. Bye, bye.

    • You have got to be kidding...When I was writing we sure did a lot more than that..and trust me, don't know any agent that didn't, doesn't or won't do some sort of underwriting to protect his appointment...tell us something we don't know, old news, you have some serious issues...this will be my last post...easy question, so smart, so knowledgeable, so rightous and so good at only finding fault..than you both obviously are more than prepared to go out and form the next great insurance company...."The Honest Insurance Company INC." so put your money and your knowledge to work..others have done it..I guess it comes down to put up or shut up...Good Luck...Ted, out.

    • Joseph (please not Mr. Joseph) puts out there what he wants you to see . . . your not wrong . . . deliberately misinformed . . . read about Hank Greenberg/AIG . . N.Y. Grand Jury finishes this week . . . Greenberg and Smith will be all over front page Wall Street Journal . . . road map what is going to take place in California once Lockyear is out . . Joseph has made a great deal of $$$ . . . so have Columbia's Cabrera . . . our point is don't accept that insurance industry is about your best interest . . . industry about making money . . . not underwriting risk . . . look at finite reinsurance accounting game . . . going on for 20 years . . . no one questioned it . . why? . . . legal? . . . depends on how accounted for . . . gamesmanship . . . insurance industry promises to cover losses in the future for $$$ today . . . what other industry gets your money for a promise . . . you work hard for your money . . . harder than Joseph . . . he's got hundred of millions . . . how? . . . we deserve the high costs we pay for health, auto, home insurance because we accept what the insurance industry tells us . . .

    • Start at message 1503 and it may open your eyes up to a whole new world of "underwriting".

    • To underwrite...are you for real.. obviously your not real smart when it comes to auto insurance. Insurance companies pay their agents/brokers contingency for good loss ratios and or retention. Many times a non-good driver may qualify for Mercury and Mercury is the lowest price, however the risk may have various underwriting reasons for not writing with's called underwriting. Lesson 101 for free..lesson 201 will not be.

      • 2 Replies to td_shw
      • Underwriting 101! You must be joking. Anyone in the business knows that profits drive underwriting and paying AIS without disclosing payment - how does that relate to underwriting anything. Volume drives underwriting not the other way around. No charge pal.

      • The greater the risk = the greater the non-disclosed contingency commission. Underwritng 101? We thought it was volume that counts! After all didn't Mercury "use-to-advertise" they write 2,000 new policies a day. Underwriting? Degree in Underwriting [101]? Underwriting guidelines are determined by "the amount of or lack of volume". Better to go out of business than to be known as a company that didn't know how to "Underwrite". Knowing how to underwrite spells success?" Underwriting? We thought it was legislation with Perata or maybe its just a "Quack-In-The-Bush".

55.249+0.099(+0.18%)10:43 AMEDT