Learn what a lag and lead measure are. Insurance companies don't get to immediately mirror a market.
You're ignoring what the article states.
State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market,”
Events that would not historically hit reinsurance and be declared a cat are now cats because the cost to rebuild is so high.
Definitely would have hit cat status. Mutuals themselves have said they never had storms like that…. Don’t hear them blaming it on the cost of lumber although it does play a part.
How are the mutuals doing that run through Grinnell? Heard of at least one mutual closing up shop (Algona)
Grinnell is dropping a lot of clients and de-risking. If you’re dropped you have to go the brokered market or merge. A lot of mergers right now. I had heard Algona is not closing shop now…
No way that would have hit cat status if everything it touched wasn't price inflated to shit. Ours probably would have, because it went straight down 80, no way the one that went through the dakotas would have in a normal pricing period.
A mutual doesn’t lose 90% of surplus due to the cost of lumber. It was a freak year in 2022. Also keep in mind that SD does not require aggregate protection.
The one that scares me is aAll-state. ( other than the one who is actually somehow running profitable gain right now).
Your right, it's lumber, labor, cost of vehicles, ect. It isn't just the lumber.
I mean, if you look at the pages and pages of claims, it’s clear that property is due to the volume of storms. Vehicles, I don’t really know. The work I’ve done with stock companies is limited and the auto sellers I did do work on were still profitable. I didn’t realize auto was being hurt like property.
O shit man. Auto is getting crushed in most states.
I have not seen that and my premiums didn’t increase that much. My limited exposure to auto is in SD and those companies didn’t get destroyed. Can’t speak for to other areas on auto.
They would still need to stay out of certain areas though wouldn’t they? Does it make sense to seek premiums in areas that are prone to forest fires, hurricanes, etc?
They are in a financial situation to run much tighter margins or even be 100% combined ratio and just starve competition.
Probably could run at a loss. I’m interested to see what happens to the mutual market. Mergers were happening all over the place but the 2022 really accelerated that. I could see a situation where there is a handful or less in every state.
He ain't gonna budge from his position, no matter much data is presented to him.
If you're talking Heartland, I believe they got re-insurance pretty close to the last minute, but it isn't an A-Rated re-insurer. Sounds like this is causing some problems for agencies E&O carriers, as they won't stand behind a carrier without an A-Rated reinsurer?
Have another carrier pulling out of the direct market, a carrier that isn't writing new business in Iowa after July 1, and now our biggest carrier putting huge restrictions on their auto and home markets for new biz. Sure am glad I signed my name on the dotted line a year and a half ago to own this place....f*ck.
Gosh, why didn't Trad post this?
www.wesh.com
Sorry to hear that. I am in insurance too. I am a captive agent for a large company. historically Iowa has been a great state for insurers to do business, that has changed due to weather events.
You'd sell the book to me, for pennies
Gosh, why didn't Trad post this?
Farmers Insurance Group stops writing new property policies in Florida
The Insurance Information Institute says the replacement cost for homes has increased 55% over three years, outpacing inflation.
LOLz
Joe, in order to have a weather related issue impact an insurer what first must happen:
Nope; claims are hitting the cat status more frequently because of climate-change related risks.
