The frequency of calamitous events so far this year has insurance companies all over the nation and bracing themselves for massive losses. With destructive weather wreaking havoc throughout the Southeast and Central U.S., many insurers have already faced $10 billion in losses due to natural disasters. According to EQECAT Inc., a disaster and risk modeling firm, the national average in weather-related losses is $4 billion. Insurers can expect to see higher than average losses as an unusually active hurricane season begins soon. Disasters overseas are likely to have an effect…
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A.M. Best reports on P&C insurance industry
A recent market analysis by A.M. Best shows there is increasing pressure in the property and casualty insurance and reinsurance sector to support rate increases. Collective insured losses from disasters in Japan, New Zealand, Australia and other events have pushed companies to safeguard their capital and push for rate increases. According to Best, some reinsurers may not see profits from underwriting for the better part of a year; caused by significant increases in first quarter combined ratios compared to December last year. Consequently, Best maintained a “stable” rating for the…
Read MoreTensions mount between brokers and underwriters
The chief executive of Catlin Group spoke at a London conference earlier this week. The conference was sponsored by Insurance Day. In London, the brokers and the underwriters they work with have been in a dispute over payments and what some consider, ‘contingent commissions’. Contingent commission is a term to describe payment to an insurance intermediary by the insurer or underwriter based on the profitability (or lower than average loss) of the business the intermediary placed with them. This practice was addressed in the U.S. several years ago; After a…
Read MoreNew energy property insurance program announced by Lexington
Lexington Insurance Company announced yesterday that it would be offering two new service products. The new set of products was designed to protect owners, developers and investors from financial losses resulting from damage or loss of energy property. Lexington presented its Energy Investment Tax Credit Insurance program, which consists of two plans. Investment Tax Credit (ITC) Energy-48 Mobile Property, and ITC Energy-48 Professional Liability. Besides protecting developers, owners and investors from property damage and loss, it was also a comeback to the recapture of ITC granted for those properties; as…
Read MoreAllstate invests heavily in online market
Allstate has announced the acquisition of insurance giant Esurance as well as its subsidiary Answer Financial. Allstate will pay in excess of $1 billion for both. The move comes in an effort to capture a bigger portion of the online market. An increasing number of consumers are shopping for insurance policies online, making Esurance a popular medium for finding affordable coverage. The massive insurance corporation has witnessed business in its personal lines dwindle of late. Allstate is looking to expand its service to online consumers, many of whom favor the…
Read MoreCat bonds still steady even with major disasters
After the devastation in Japan two months ago, investors were keeping a watchful eye on the stock and bond market. It appears though, that the catastrophe bond (CAT bonds) division has been holding strong. Analysts and brokers have commented that no drastic price decreases or large spreads have occurred to cause them to be worried. The recent earthquake and tsunami in Japan were what investors are calling the biggest adversity to happen since the financial woes of the Lehman Brothers filing for bankruptcy. The catastrophe bond sector is still strong…
Read MoreInsurance companies hit hard by recent storm losses
The recent outbreak of severe storms last month has added up to a massive bill for insurers. The severe storms and tornado’s in April has been called the second deadliest outbreak in U.S. history; falling barely short of the record Tri-State tornado outbreak in 1925. Insurance companies across the board are reporting high losses, such as Allstate, with a whopping 1.4 billion dollar loss; just for the month of April. Several insurance companies are reporting big losses for April, due to the historic weather events all through the southern states.…
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