All GLG News Analyses Filed Under: Insurance & Risk Management
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
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Important Issues for Florida Property Insurance
April 21, 2008
Florida Property Insurance Poll: No More Quick Fixes | www.insurancenewsnet.com
This article addresses issues about Florida Property Insurance that are important to policyholders, insurers, and the general public. The basic thrust of my comments are to outline important actions for the state and the insurance regulators to take, and to explain why heavy regulation of insurance rates is counterproductive. There is also a URL where the insurance regulator's recent presentation to the Florida legislature is outlined.
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Insurance For Troubled Borrowers: A Risk to the Taxpayer
April 14, 2008
FHA Expands Mortgage Insurance to Troubled Borrowers | www.bloomberg.com
Implications: 1."At Risk" - Federal Mortgage Insurance for Tainted borrowers at the brink of foreclosure. 2.A Transfer Mechanism , which will faal bt default to the US Taxpayer. 3.Lenders will receive a "Hope" of more recovery within the parameters of rising mortgage delinquencies? 4.The Regulatory Authorities MUST find the balance between protection for the Homeowner and , additional, burdens of the Taxpayer. 5.Negative Equity - 3% and 10%.Delinquency rates are two (2) to three (3) months in arrears. Has the question been asked: "Why"?. 6.Federalization of the Housing Market May, likely, have a dramatic affect on the core competency of the economy! 7.An issue for contemplation - "What should be the role of the Financial Services Industry and, to what extent should the Consumer be held Accountable"?.
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With Hurricane Season Approaching, Have Insurers Been Charging Enough?
April 14, 2008
Active hurricane season predicted | www.businessinsurance.com
This Storm Season Will Identify Those Carriers Who Have Managed Growth And This Soft-Market With Discipline.
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Private Sector Solutions To Florida's Property Insurance Problems.
April 11, 2008
Florida Property Insurance Poll: No More Quick Fixes | www.insurancenewsnet.com
The article on Florida Property Insurance is somewhat on target. Where it goes aray is injecting government assistance. Politicians never solve anything. The property indemnity marketplace will find viable solutions. The MASH unit approach to property insurance is at best myopic. Insurance companies who write a variety of P&C coverages in the State must follow the State Insurance regulators rate parameters on property coverages, or forfit their right to underwrite all other forms of liabilty in Florida. There also need to be thinking "outside the box", like forming a Florida Insurance Exchange whereby security firms such as Merrill Lynch, under SEC guidance would solicite and form underwriting syndicates, ala LLoyds of London to amass fresh underwriting capital to address both residential and commercial property liability risks in Florida, to the exclusion of the major carriers such as Allstate, Nationwide, State Farm, etc., who have held the citizens of Florida financial hostages.
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The Insurance Market Declines: Specialty Insurance will Deteriorate
April 9, 2008
Soft Part Of Cycle Still Ahead, E&S Exec Says | www.propertyandcasualtyinsurancenews.com
Implications: 1.The major default is a softening of the entire insirance marketplace. Perhaps the Credit Crisis has not been , fully, defined. 2.The soft cycle, as defined by the private equity buyer, has Not evolved - full cycle. 3.A theory presents itself - " A firm's understanding of the Dynamics of Insurance Markets enlarges the scope of being a Buyer". 4.Investors are , now, able to EVALUATE the performance of a company over the past cycle: Two (2) to Four (4) years. 5.Overcapacity of Capital prsents the option of having the ability to absorb large losss. 6. Restrictive underwriting has played a crucial role in this developing situation.
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April 7, 2008
US property insurance 2008 rates seen flat to soft | www.reuters.com
What is a business or homeowner's biggest fear? One of them is the fear that something will happen and the insurance company will not be able to pay their claim. This is simply a false fear in this day and age. Simply stated, insurance companies are running a business and they understand that if they are unable to pay claims, they will not only lose the trust of their company shareholders, they will also lose the trust of their clients. Insurance companies operate in a competitive market, however they do not rely on low prices to sell their products. Would a retail firm sell their product at below cost. Most likely they would not due to the fact they would not make any money and could go out of business. Insurance companies, under the same mantra, do not price their products so low that they can not retain a profit in the event of claims.
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Service is not determined by size
April 4, 2008
Smaller Brokers Can Add Up To Better Service | www.propertyandcasualtyinsurancenews.com
Statistical data is often not meaningful information The service of an insurance brokerage firm is anything but a homogenous product where product and service efficacy can be expected from one office location to another, one division to another or even between colleagues in the same division or office. The process is very dynamic and changing one broker to another can have a myriad of reasons but most often occurs when there are changes in personnel between either party - client or broker.
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Florida Property Insurance Poll: No More Quick Fixes
March 31, 2008
Florida Property Insurance Poll: No More Quick Fixes | www.insurancenewsnet.com
Government band-aids can only cover injuries that a true free market can heal.
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Douglas RossbachPartnerRossbach Consulting
Poor Judgement Weighs Heavily on MGIC Stockholders
March 31, 2008
MGIC Sells $745 Million In Stock, Bonds | www.propertyandcasualtyinsurancenews.com
MGIC shareholders are bearing the brunt of a number of bad decisions that have decimated the stock price and called into question the very survival of what was once the industry leader. The latest ax to fall is the announced downgrade in ratings by Moodys followed by news that MGIC had issued 37.7 million shares to raise $420 million in capital. While MGIC claims the capital is being raised to pursue market opportunities, Wall street apparently isn't buying it and neither do I. MGIC's stock price has plummeted an additional 8% since the news. The capital raise is required to stabilize the credit ratings, priovide additional capital to cover future losses, and manage through next two years of high credit losses. They are likley to survive due to improving market conditions including increasing credit spreads, improved persistency, better underwriting, and closer attention to credit risk.
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March 27, 2008
Smaller Brokers Can Add Up To Better Service | www.propertyandcasualtyinsurancenews.com
Realty brokers are presently the king-pin on metal commodity prices. Small brokers can out perform on quality but on size as large players outperform by sheer quantity. Small brokers as a community has better reach though little un-organised. As globalisation on transactions are happening, small brokers would emerge victorious. Funding to small brokers should have special lines of credit and mechanisms towards that philosophy. It is different in different countries to get a perceived value of benefit in interacting with such robust 'small' brokers. Decades back these systems have not been engineered to work in our favour; however the next decade so to say would become the decade of small brokers. Quality and Tilmelines of deliverables would be the key differentiating philosophies in these segments of businesses. Consequently these small brokers' business must flourish and probabaly a little better formatting of corporates would solve larger and sensitive issues prevailing in our market
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