chris m. posted an article on Risk(y) Business - Feb 7, 2012, 7:10 am
The 2011 combined ratio predictions came out today and it looks like the insurance industry lost money on underwriting, again!. The industry continues to defy basic underwriting principles to compete for growth. This strategy is usually "saved" by investment income and claim paying practices where...
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chris m. posted an article on Risk(y) Business - Jan 31, 2012, 11:18 pm
A few years back I was part of a team of authors that wrote a book on credit scoring. The credit scoring model was realatively new and was getting a lot of attention. Our research showed that the alogirithms used were actuarially sound as low income folks with bad credit scores deserved higher rates...
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chris m. posted an article on Risk(y) Business - Jan 28, 2012, 10:04 pm
Dealing with human beings on the job is a real challenge for a risk manager. The recent Federal laws and all the State laws that are in place to protect the employee from bad employer practices, has made risk managers work extra hard to comply. If you are a risk manager by profession you better know...
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chris m. posted an article on Risk(y) Business - Jan 25, 2012, 6:38 am
The Federal Crop insurance program had record payouts last year. Analyst state that the reasons are increasing weather disasters and the rising costs of getting crop in the ground. The issue at stake is how long can the program exist at record claims. As it is not making an underwriting profit ...
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chris m. posted an article on Risk(y) Business - Jan 21, 2012, 9:21 am
Solvency II creates a standard of capital requierments for insurance companies to make sure they are stable for future losses. However the law will stretch to captives and how captives are capitalized. If this will hurt the formation of captives will remain to be seen. Many analysts say it could. C...
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chris m. posted an article on Risk(y) Business - Jan 19, 2012, 12:45 am
In a recent survey of corporations with over 10,000 employees, internal risk management cultures have increased 42% from just a few years ago. i guess the 2008 financial crisis woke everyone up. Unfortunately there are still many businesses that have yet to establish a risk management culture. In a...
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chris m. posted an article on Risk(y) Business - Jan 15, 2012, 12:22 pm
Risk managers across the country are looking at cyber insurance as a major add on to their insurance portfolios. Cyber crimes are growing and the use of cloud and wireless connections are growing which means businesses are targeted more and more. Cyber insurance does cover most of the liability and ...
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chris m. posted an article on Risk(y) Business - Jan 13, 2012, 8:18 am
Currently, states across this great country regulate insurance. For almost  a century, states have done a great job making sure consumers are protected and insurance companies are financially solvent. Now we are starting to see a push for more federal oversight of insurance. The new FIO (Federal In...
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chris m. posted an article on Risk(y) Business - Jan 6, 2012, 4:31 pm
With the Affordable Care Act (Obama Care) making it a mandate that health companies include commissions in the medical loss ratio (MLR), brokers find themselves in a troubling predicament. If this is not reversed many companies, in not all health companies, will stop paying commissions. This has al...
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chris m. posted an article on Risk(y) Business - Jan 1, 2012, 9:19 am
In a recent report, 25% of flood claims from hurricane Irene are still not processed and small businesses are suffering. The NFIP is responsible for paying the claims and private insurers are responsible for processing them. Fingers are being pointed at the NFIP because they have yet to fund the cla...
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chris m. posted an article on Risk(y) Business - Dec 26, 2011, 1:36 pm
Commerical Airplanes have "black boxes"  to tell the company how pilots are flying and also help put together the story after a misfortunate crash. This technology is now being moved into automobiles and the insurance companies are taking advantage of it. Using the monthly reports that the black b...
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chris m. posted an article on Risk(y) Business - Dec 18, 2011, 9:14 pm
Insurance companies are paying claims from accidents caused by distracted driving. This has put a lot of pressure on legislatures to pass laws preventing the use of cell phones while driving. But is this short sighted? It may be. Look at all the gadgets cars have these days to cause distractions. GP...
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chris m. posted an article on Risk(y) Business - Dec 12, 2011, 7:08 am
Insurance companies have been using to much success, three pricing models over the last few years. These highly sophisticated computer algorithms have kept pricing soft during the recession. This has been good news for buyers of commercial insurance. For 2012 and 2013 insurance companies are using...
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chris m. posted an article on Risk(y) Business - Dec 6, 2011, 8:59 pm
Accord changed the certificates in 2010 and most agents have put the new certs in play. The new certs however are causing agents and brokers a whole lot of extra work and frustrating clients. In the old days agents were amending certs to satisfy their clients contractual demands. Most of the time t...
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chris m. posted an article on Risk(y) Business - Nov 27, 2011, 7:34 pm
Unfortunately for small business owners insurance rates will go up in 2012. Why? Quite frankly insurance companies are losing money. Now they have been losing money on underwriting for sometime now, but have always managed to keep in the black because of investments and reserve releases to pad th...
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chris m. posted an article on Risk(y) Business - Oct 30, 2011, 9:15 pm
As halloween approaches tomorrow night I can only think about how much risk is involved in this event. Lets take the risk management process and apply it to "trick or treat". First, let's identify the risks:  Kids running through the streets at night, more cars on the roads shuttling kids, people...
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chris m. posted an article on Risk(y) Business - Oct 27, 2011, 8:09 pm
The incidence of concussions has increased in football. Diagnosis of this brain condition has improved with new testing and protcols, and it is now evident that helmet hits are the main cause. Risk managers are trying to find a ways to mitigate the risk with new designs and materials, however ris...
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chris m. posted an article on Risk(y) Business - Oct 23, 2011, 4:22 pm
Risk modeling has done a very good job at prediciting direct damage estimates from natural disasters and other claims. The models however have fallen short when trying to predict contingent damages. The last few years has been a real eye opening experience for insurers and reinsurers. The Japanese e...
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chris m. posted an article on Risk(y) Business - Oct 18, 2011, 6:40 pm
As predicted by many in the industry the long soft market in work comp has deteriorated the profitability in this line of insurance. This has forced many States in the country to ask for rate hikes over the next 12 months. Though needed by the insurance companies to preserve the market, business ...
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chris m. posted an article on Risk(y) Business - Oct 17, 2011, 6:49 am
The long term health care provision in the Obama health care law was dropped by congress the other day. No doubt the reason was the numbers. The private LTC market is reeling already because actuarially it has been hard to get a handle on the right premiums to charge. This product is a coverage that...
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chris m. posted an article on Risk(y) Business - Oct 11, 2011, 8:34 pm
Health insurance premiums are rising and will continue to rise with the implementation of  Obama Care according to Towers Perrin analysis. This is going to put a lot of pressure on the health exchanges as more people will be put in the pools to cover. I do not think the architechs of the plan figur...
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chris m. posted an article on Risk(y) Business - Oct 11, 2011, 7:51 am
The city of New York risk management department must be working overtime right now. With the protesters milling around the worlds financial district, the risk of a major event causing property damage and injury is very high. Mayor Bloomberg's statement to allow the protestors to stay as long as the...
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chris m. posted an article on Risk(y) Business - Oct 9, 2011, 8:23 pm
Well, what now insurance companies? Rates have been so low for so long and underwriting has not really been underwriting, that sooner or later the piper had to be paid.. Well the piper has started to collect as insurers earnings have decreased significantly and combined ratios are climbing. The in...
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chris m. posted an article on Risk(y) Business - Oct 3, 2011, 2:29 pm
It is going to be very hard for Nationwide to give the Harleysville Independent agents access to Nationwide products and not give Nationwide agents access to Harleysville products. This is the beginning, I believe of major changes in the independent agency system. This merger will most likely blur ...
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chris m. posted an article on Risk(y) Business - Sep 29, 2011, 6:47 am
The headlines this morning are buzzing with the news that Nationwide and Harleysville are working a merger deal. This event has generated some real interesting questions. First, will this start a trend of direct writer companies buying into the independent agent marketplace? It just might. Premium ...
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chris m. posted an article on Risk(y) Business - Sep 22, 2011, 10:16 pm
The Fed today announced a lowering of interest rates by buying up long term treasuries. This will directly affect Life insurers earnings. Life insurers have long term treasuries in their life product insurance portfolios and the Fed move will lower their earnings and put the products at risk. Annu...
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chris m. posted an article on Risk(y) Business - Sep 19, 2011, 4:34 pm
The Virginia Supreme Court just ruled that claims under the CGL for damages caused by global warming are not covered under the CGL. The court ruled that there is no trigger for the claims. This case most likely will be a precedent that other insurers will use as these claims arise. Global warming in...
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chris m. posted an article on Risk(y) Business - Sep 13, 2011, 5:55 pm
There is an increased activity in claims centered around cyber liability. The insurance industry has been slow to react to this risk as insurance products for this coverage are still in their infancy. Sony was the first really big profile claim and their insurer is denying coverage. However small bu...
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chris m. posted an article on Risk(y) Business - Sep 9, 2011, 8:18 am
If Congress passes the Flood Modernization act, then flood rates will go up 15% a year for a while in order to get the program in line with actuarial rates. This will most likely cause more people to be uninsured for floods as the premiums rise and people drop the coverage. In the short term this is...
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chris m. posted an article on Risk(y) Business - Sep 7, 2011, 6:49 am
I got a email from Progressive insurance company the other day. They were offering premium payment suspensions or ... dealing with damage from Hurricane Irene. To me this is an incredible marketing strategy. It creates value for the customer and it is remembered and ... companies need to be aware a...
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chris m. posted an article on Risk(y) Business - Sep 4, 2011, 9:33 am
I was reading the latest loss reports from some of the major companies in the country and weather realted losses are still topping everything. Everyday we battle underwriting to insure our clients at the most affordable rates. The companies throw at us algorithms that adjust our clients pricing bas...
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chris m. posted an article on Risk(y) Business - Aug 31, 2011, 10:15 pm
Fracking could be the next "gold rush" for the US. There is so much natural gas in the ground that our energy needs could be fulfilled for the next 150 years. However there is a dispute, the process of getting the natural gas out of the rock (Fracking) could pollute ground water, some scientist say....
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chris m. posted an article on Risk(y) Business - Aug 28, 2011, 11:51 am
I am sitting in my house the day after we experienced a hit from hurricane Irene. Everything came through ok with just some branches down and a messy yard.  Flooding is going to be the ultimate damage maker with this storm. The storm is now in New York hundreds of miles away and we are still gettin...
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chris m. posted an article on Risk(y) Business - Aug 23, 2011, 6:48 am
The tragedy at Indiana State fair is going to be a discussion of risk management. As lawyers for the injured line up with suits and engineers and adjusters do their investigations, the talk will eventually become one of risk control. How was risk managed and what control measures were in place will...
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chris m. posted an article on Risk(y) Business - Aug 22, 2011, 6:03 am
Attention all risk managers, flash mobs are becoming problematic all over the US. How to control these creations of technology is problematic. Risk managers and insurance providers will have to put their heads together to find some risk control mechanisms to curb the destruction of property and pers...
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chris m. posted an article on Risk(y) Business - Aug 16, 2011, 7:42 am
I just finished a conversation with one of my marketing reps from a leading national carrier and he was complaining about their 140% combined work comp loss ratio. We both agreed that the rates are too low, and have been too low for years to absorb any uptick in claims frequency. Well, as the indust...
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chris m. posted an article on Risk(y) Business - Aug 11, 2011, 8:03 am
Marsh, Aon, and Willis all recently reported organic growth in premium due to overseas insurance sales. Is this the future for small independent brokers in the US?  Most likely. As the US economy sputters and the premium pie gets sliced up more and more, doing business overseas becomes are real str...
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chris m. posted an article on Risk(y) Business - Aug 9, 2011, 11:24 am
The latest results show that captive insurance companies are showing higher profits and better dividends than standard insurance company results. Why is this?  Well for one the insureds are the owners so they have plenty of skin in the game. Safety and risk management have to be a priority in order...
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chris m. posted an article on Risk(y) Business - Aug 3, 2011, 8:44 am
I am fortunate to get a real sense of the state of the economy because of my clients. In meeting with small business owners everyday around my area I can sum up the US economic woes in three words, "lack of confidence". Now this is not lack of confidence in themselves as business owners, but in the ...
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chris m. posted an article on Risk(y) Business - Jul 28, 2011, 6:20 am
To beat commodization of insurance, agents have been working real hard to create and show value to their customers. By developing services that can be shown to differentiate themselves from the competition, agents hope to secure relationships. However there is a big disconnect in the real world. The...
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chris m. posted an article on Risk(y) Business - Jul 24, 2011, 10:04 pm
Even a big corporation like Sony is not covered for cyber crimes by their General Liability policy. Is this a shocker? You bet. As more and more companies get nailed by the cyber hackers, insurance companies are having to adjust claims and  guess what , cyber crimes are just not covered under the ...
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chris m. posted an article on Risk(y) Business - Jul 19, 2011, 8:15 am
S&P announced today that they may downgrade some insurers if the debt ceiling is not raised. Mainly because of the high amount of investment capital insurers have tied up in US Treasury bonds. I find this incredibly interesting that an solid operating insurer can be downgraded because the FED cannot...
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chris m. posted an article on Risk(y) Business - Jul 17, 2011, 8:50 am
In the 25 plus years as a broker I usually see a claim occurr where a repeat offender driver is behind the wheel. It is the same ole story, the driver has been put on a watch basis or counseled many times. The owner of the business demands that the driver stay on the driver list because they are ...
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chris m. posted an article on Risk(y) Business - Jul 15, 2011, 8:04 am
I was so glad to see the Big I (Independent Insurance Agents of America) and their exec, Robert Rusbuldt , challenge  GM's" free "auto insurance marketing plan.  As an independent agent and broker it was always taught to me by law that you cannot "lure" customers to buy insurance with offers ...
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chris m. posted an article on Risk(y) Business - Jul 12, 2011, 9:35 am
The current discord over the debt ceiling between the President and the Speaker of the House is proving to be a complicated mess. There is no real easy short term answer to the problem. The Fed is spending to much and living beyond it's means. Adding more debt is not the solution, good common se...
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chris m. posted an article on Risk(y) Business - Jul 7, 2011, 8:01 am
In some states with the purchase of a new GM car you can get free car insurance for a year. Free you say?  Yes that is the way it is being advertised. I have to wonder if this is really a legal marketing strategy. Most states that I know of have certain marketing guidelines that prohibit this type ...
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chris m. posted an article on Risk(y) Business - Jul 5, 2011, 7:22 am
Developing a risk managment culture in small companies is a challenge. Most small businesses are run and managed by the owners who are also the chief risk officer. The day to day work that goes into just keeping the doors open, makes risk management seem unimportant. Also there is a misconception th...
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chris m. posted an article on Risk(y) Business - Jun 29, 2011, 8:31 am
With the July reinsurance renewals fast approaching, many are wondering if the commerical insurance market will harden up. Most commercial insurance buyers are expecting rates to flatten but not go up. If the insurance industry thinks it can increase rates rapidly to make up for the years of underpr...
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chris m. posted an article on Risk(y) Business - Jun 26, 2011, 9:42 pm
With the passage of the Dodd Frank bill to prevent another economic meltdown , directors and officers find themselves under the microscope. With the passage of the bill there is a whistle blower clause that gives a hefty reward for insiders giving up info on how the directors and officers are runn...
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chris m. posted an article on Risk(y) Business - Jun 24, 2011, 8:41 am
I just finished a podcast on the value of using the risk management process with fleet safety. Implementing the five step approach prior to driving can have great results but there is a problem. Drivers in the hurried time before they get in the trucks just do not want to go through a risk managem...
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