Talk about a parallel universe! "MIG" was the ticker symbol for....Mission Insurance Group, that collapsed in a heap in the early 1980s. Guess what they wrote? Among the major lines was workers comp, written in the California market through MGAs. Cubbin hasn't learned a thing in thirty years! Not a damned thing! Compared to other industry execs, Cubbin's experience amounts to diaper rash. He and his cohorts ought to actually take a trip out to California and see what his agents are really putting on the books. It would curl his hair if he knew anything, but instead he'll just smile and tell the boys to write more!
I think this oops may be pretty close to impossible to extricate from. Since they depend (mostly) on their agents to do their underwriting and pricing for them, (compensated primarily by commission), the company does not have a ton of expertise in underwriting, especially workers compensation. They are also very leveraged, so they need to fix things quickly. If they do, it will be a long time before they get a good rating back. If they have to increase reserves again, they may be sunk. I think the best thing for survival is for the company to hire a real expert at underwriting their long tail business and go through ruthlessly and dump below average business, increase prices to adequate on other business. Goal being they be about half the size they are now, but with a good core. Of course they also have to be writing business that can handle a less than A- rating. Obviously their short tail business that is not generating a profit needs to go ASAP.
This could all change if there is a serious company that will buy MIG for more than the current stock price. I suspect companies would not be buying for the business, but perhaps for the reserves (and lay off all employees). Hopefully, management can create a great strategy to eventually win--or sell.