- Despite lawsuit restrictions, insurance experts say storm risks propelling rising rates
- NFIP claims paid after Hurricane Ian exceeded $3.4bn in March
- Floridas lawsuit deluge threatens weakened insurance market: Triple-I
- Floridas lawsuit deluge threatens weakened insurance market
- Florida imposes 1% emergency fee to property insurance premiums
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Friday, March 31 2017
U.S. personal auto underwriters increased premium rates “significantly” in 2016. But here’s the thing: it wasn’t enough.
Loss trends are still outpacing rate changes. Also, the U.S. P/C industry statutory combined ratio will likely hit 108 in the coming months, a 3.5 percentage point rise and the weakest result in 15 years, Fitch Ratings noted in a new report.
“Results are likely to improve moderately in 2017, but competitive forces and market fundamentals will inhibit a shift back to an underwriting profit in personal auto for some time,” the Fitch report asserted.
A number of factors are at play that mean the market is still weakening, Fitch said. GAAP auto segment results show higher combined ratios for nearly all of a group of 10 publicly traded insurers in 2016, Fitch said, with an average combined ratio increase of 3.3 points from 2014 to 2016.
As Fitch pointed out, carriers including Progressive and Infinity Property & Casualty Corp. continued to generate major underwriting profit for personal auto despite industry weakness. But the overall market continues to weaken in terms of annual underwriting performance because of higher catastrophe related losses and unfavorable claims experience. State Farm Mutual Insurance Group is a major example of this, Fitch said, due to its reported $7 billion underwriting loss (18 percent of earned premium).
Also, personal auto underwriters continue to face adverse loss trends that drove higher claims costs over the last two years. They include claims frequency jumps from more miles driven, more distracted driving, higher physical damage losses because of more complex and sophisticated automobile parts, and higher bodily injury costs from more severe accidents.
As well, the Consumer Price Index data for auto insurance costs grew by 7.6 percent in February 2017. Fitch said that that points to continuing rate increases in the short term, which should lead to some modest underwriting improvements through the year.
Underscoring the challenges ahead, Fitch said that risk modeling for the sector, among the most sophisticated efforts in the industry, has not done its job the way it should.
“Personal auto insurance is technologically the most advanced P/C market segment with tremendous progress over time in data analytics that enhance risk selection, price segmentation and predictive claims models,” Fitch said. “Recent poorer results in auto insurance reveal that the most sophisticated models may not fully anticipate changes in loss cost trends.”
There’s another potential challenge for the sector. Fitch added that underwriters may not be paying complete attention to what risk modeling tells them “due to competitive pressures and an interest in maintaining premium volume and policy retention levels.”
State Farm lost $7 billion on its auto insurance underwriting in 2016. In 2015, the underwriting loss was $4.4 billion.
State Farm is far from alone in seeing deteriorating results in its auto insurance line. GEICO, Travelers, Allstate, The Hartford and other insurers are also looking for ways to counter rising auto costs. Analysts have reported that the auto line has been a drag on P/C insurers’ results.
In Travelers’ fourth quarter report, CEO Alan Schnitzer acknowledged the difficulty of the personal auto business.
“While homeowners profitability remains strong, we are disappointed with the underwriting results in personal auto and are taking pricing and other actions to improve its profitability,” Schnitzer said.
Thursday, March 30 2017
A recent crash involving an Uber Technologies Inc. driverless car suggests autonomous software sometimes takes the same risks as the humans it may one day replace.
The accident on Friday in Tempe, Arizona, caused no major injuries. Another human-driven car turning left failed to yield, hit the Uber car and flipped it on its side. After a short pause, the company’s self-driving test fleet was back on public roads in Tempe, Pittsburgh and San Francisco early this week.
But the Tempe Police Department report, released Wednesday, recounts a complex story.
The Uber Volvo SUV, outfitted with autonomous driving sensors, was heading south on a wide boulevard with a 40 miles-per-hour speed limit. It had two of the company’s test drivers in front and no paying passengers. The light turned yellow as the vehicle entered an intersection. A green Honda on the other side of the road was trying to make a left at the light. The driver thought it was clear and turned into the oncoming Uber SUV, according to the police report.
In a statement to police, Patrick Murphy, an Uber employee in the car, said the Volvo SUV was traveling 38 miles per hour, a notch below the speed limit. He said the traffic signal turned yellow as the Uber vehicle entered the intersection. He then saw the Honda turning left, but “there was no time to react as there was a blind spot” created by traffic. The Honda hit Uber’s car, pushing it into a traffic pole and causing it to turn on its side.
During the event, the Uber vehicle was in autonomous mode, a spokeswoman for the company and the Tempe police said.
Others involved in the accident, though, didn’t imagine a robot behind the wheel. Alexandra Cole, the driver of the Honda, told police that she could not see any cars coming when she decided to make the left turn. “Right as I got to the middle lane about to cross,” she wrote, “I saw a car flying through the intersection.”
Another witness told police that Cole was not at fault. “It was the other driver’s fault for trying to beat the light and hitting the gas so hard,” Brayan Torres told police in a statement. “The other person just wanted to beat the light and kept going.”
Eyewitness accounts can often be unreliable, and other witnesses in the police report did not say that the Uber car was at fault — something the police agreed with. Still, Torres’s account raises the question of whether Uber’s self-driving sensors spotted the light turning yellow and, if so, whether it decided it could safely continue through the intersection.
One of Uber’s self-driving SUVs ran a red light in San Francisco last year, and on five other occasions the company’s mapping system for its cars failed to recognize traffic lights in the area, the New York Times reported in February.
Uber’s problems show the potential hurdles to winning approval for autonomous vehicles from the public and regulators. The company, and rivals like Alphabet Inc.’s Waymo and major automakers, are working to tweak software to handle “edge cases,” like unusual driving conditions.
Self-driving cars have more often been criticized for driving too cautiously, slowing or stopping when human drivers would be more aggressive. Autonomous vehicles operated by Waymo have been rear-ended due to such issues and the company has been working to make its system more human.
There is a potential upside for Uber from the Tempe crash: It now has rich, unique data to use for its self-driving program. Last year, after a Waymo car car bumped into a bus, the company said it used the incident, and “thousands of variations on it,” to refine its software.
“This is a classic example of the negotiation that’s a normal part of driving — we’re all trying to predict each other’s movements,” it added.
Wednesday, March 29 2017
When my wife fell on the ice a few years ago, she thought her wrist was broken. She went to see her doctor, who advised her to have an X-ray taken in the same building. Since her wrist was still crooked months later, she had a second X-ray done at an imaging facility nearby.
Afterward, her health insurance company sent the “explanation of benefits” for each X-ray. The initial one was billed at $1,200, while the second one cost only $100.
Why the big discrepancy? Her doctor’s practice, the X-ray facility and the building they’re in are owned by a corporation that also owns several area hospitals. When she called its corporate office, a spokesperson told her the $1,200 X-ray was taken at a “hospital” and was therefore billed at the “hospital rate.”
She pointed out that the so-called “hospital” had no emergency room, no beds for patient admission and, furthermore, wasn’t even listed on our state’s insurance website as a hospital. The corporation caved and reluctantly refunded her the $1,100 difference in the price of the two X-rays.
While my wife’s predicament had a satisfactory ending, in most instances, hospital corporations win. And this winds up costing everyone, including Medicare and Medicaid, health insurers, Americans with high-deductible insurance policies and, ultimately, the taxpayer “tens of billions of dollars,” according to Dr. Ezekiel Emanuel, chairman of the Department of Medical Ethics at the Wharton School of Business who’s a doctor of oncology.
Emanuel is only one of many medical experts, including members of the federal Medicare Payment Advisory Commission (MedPAC), who are incensed by the way hospital chains are buying up doctors’ practices and outpatient facilities to maximize profits. And this comes at a time when Congress continues to search -- so far in vain -- for a plan to salvage a health care system described as “broken,” hemorrhaging dollars and about to implode.
There’s a way to do it, said Emanuel, whose efforts to reform health care include serving as an architect of President Barack Obama’s Affordable Care Act, and who has now offered advice to President Donald Trump.
But a solution really needs to understand the problems. And this is one of them.
“Across the country hospital systems are scouring the market in attempts to acquire physician groups,” said Medical Billing Advocates of America in an article on its website. “This has contributed to increased costs so far, because some of the services and procedures that were formerly billed as doctor visits are now being billed as outpatient services – even if it is the same office. In one year, this [facilities fee] added up to $1.5 billion more in charges to the Medicare program.”
Medical Billing Advocates referred to this practice as “a real cash cow for hospital systems.”
But Medicare is only one source of funds for hospitals, which also collect from Medicaid, health insurers, uninsured patients or those insured with high deductibles. “Many are concerned, and rightfully so, that the excuse to charge a facilities fee is one of the main reasons hospital systems want to buy up practices,” said the article.
The American Medical Association did not respond to a request for information on how many doctors’ practices had been bought by hospital corporations, but the number is presumed to be large and growing. One hospital chain cited by Modern Healthcare, a magazine for health care executives, had an 86 percent jump in physicians and providers between 2009 and 2014.
And doctors’ practices aren’t the only targets. Outpatient surgery centers, clinics and imaging facilities are also on their radar.
This maneuver allows hospital chains to submit bills with coding that infers that the patient was treated at a “hospital,” even if the location is just an office or outpatient facility. It also encourages these doctors, who are now hospital employees, to advise patients to use the hospital for routine procedures that could be done cheaper elsewhere.
That’s often a huge waste of money, said many experts, including Gerard Anderson, professor of medicine at Johns Hopkins University School of Medicine, one of the nation’s foremost hospitals.
“There is no reason for anyone to pay more because the care was provided in a hospital instead of a doctor’s office. The doctor is the person providing most of the care, and for most procedures care can be provided in the doctor’s office,” said Anderson. “Paying twice as much for your annual exam in a hospital outpatient department simply makes no sense.”
But it does makes sense for the hospital. Government-set payment methodologies allow for different payments depending on the setting. Medicare alone uses a dozen different payment systems, according to the journal Health Policy. This allows for “dramatically different payment rates.”
Knowing how to place the patient in the right “setting” nets the hospital a lot more money. One study in the Journal of the American Medical Association suggests $75 more per visit without any increase in the level of care.
But Emanuel said it’s more likely a “ten-fold difference” in the amount charged. He added that “If there’s no difference in quality, you shouldn’t be paying more. They are profit-maximizing at our expense.”
In studies and briefs, hospitals argue that the services provided and the overhead associated with running a huge facility justifies the increased cost -- even though most patients don’t need to have a routine procedure such as a colonoscopy done in a hospital.
With additional funds from patients with health insurance, hospitals “cross-subsidize” those who walk through the door with emergencies but have little or no insurance, said Dr. Emanuel.
So he and others are proposing a simple solution: “site-neutral payments.” In other words, a procedure is a procedure, no matter where it’s done. “The address and the four walls around you shouldn’t make a difference, as long as the quality is the same.”
Thursday, March 23 2017
You may be reading about a recently approved endorsement for work comp policies which allows insurance companies to charge up to 2 times estimated annual premium, if the policyholder is uncooperative with the premium audit. This endorsement does not apply in Florida, as it is unnecessary, because the penalty in Florida is far more punitive.
If a Florida employer does not cooperate with the final premium audit, then the carrier may charge a premium up to 3 times the estimated annual premium. For example, let's assume a business has an estimated annual premium of $50,000, and they refuse to cooperate with the audit process. The carrier may charge the employer a $150,000 penalty on top of the estimated premium of $50,000.
But that's not all ...
If the employer conceals payroll or misrepresents employee duties as to avoid misclassifications, then the carrier can charge 10 times the difference between what the employer paid, and what they should have paid. In addition, employers could be subject to criminal penalties.
Wednesday, March 22 2017
Risk to U.S. property from thunderstorms is as high as from hurricanes, according to new research finding that for the past decade, severe convective storms have been the largest annual aggregated risk peril to the U.S. insurance industry.
The average annual loss from severe convective storms (SCS) including tornadoes and hailstorms was $11.23 billion, compared with $11.28 billion from hurricanes for the period 2003 to 2015, according to research published by Willis Re, the reinsurance division of global consultant and brokerage Willis Towers Watson. The report, Managing Severe Thunderstorm Risk, was compiled with Columbia University using Verisk Analytics’ Property Claims Services loss statistics.
The research reviews the impact on SCS activity of the El Nino-Southern Oscillation (ENSO) effect of warming seat surface temperatures in the eastern and central tropical Pacific. ENSO is the main source for forecasting seasonal temperatures and rainfall, especially during the fall and winter, the report notes.
According to the report, the number of tornado and hail reports was actually low in 2015 and 2016 compared to previous years, which could have been related to the strong El Nino warming conditions around the same time.
“Regional variability in increased or reduced severe convective storm frequency due to the El Niño-Southern Oscillation (ENSO) phase can have a significant impact on regional and single state property insurance companies,” according to Prasad Gunturi, executive vice-president, Willis Re.
He said Willis Re is working with Columbia University to develop a set of severe convective storm probabilistic loss estimates to help companies “understand, manage and mitigate the regional and year over year variability in severe convective storm losses.”
Willis Re plans to produce monthly forecasts of tornado and hail activity for client use.
“The latest research shows that ENSO and other climate signals modulate the frequency of tornado and hail activity in the U.S. We’re excited to be using that research as a scientific basis for making long-range (up to a month) forecasts of the meteorological factors that go along with severe convective storms,” said Michael Tippett, associate professor in Columbia Engineering’s Department of Applied Physics and Applied Mathematics.
Monday, March 20 2017
Most commercial insurance prices in the U.S. were nearly flat during the fourth quarter of 2016, although prices continued to go up for commercial auto.
The most recent Commercial Lines Insurance Pricing Survey (CLIPS) from brokerage and advisory firm Willis Towers Watson compared prices charged on policies written during the fourth quarter of 2016 to those charged for the same coverage during the equivalent quarter in 2015.
Most price changes were comparable with those reported in the third quarter. Data for two lines — workers’ compensation and commercial property — indicated modest price decreases, while directors and officers data continued to suggest more significant, albeit moderating, price reductions. In contrast, commercial auto once again experienced meaningful price increases, according to the report.
For most other lines, price increases were in the low single digits. Price changes were fairly similar across segments, though slightly negative for large accounts and marginally positive for small and mid-market ones.
“The rapid growth in the rate of price increases seen in 2012 has since slowed for much of the commercial market, but not for commercial auto. This line’s cumulative price increase since 2012 is over 25 percent, compared to about 10 percent for the surveyed commercial market as a whole,” said Alejandra Nolibos, director in Willis Towers Watson’s Americas Property & Casualty Insurance practice. “Loss experience has been benign for many of the other lines, but the dynamics of the auto business are changing quickly and dramatically, ultimately driving challenging results and rate need for the line.”
Friday, March 17 2017
Assignment of benefits abuse has escalated over the last five years to the point where it is now a serious disruption to Florida’s insurance market.
The abuse, which is especially rampant in South Florida, stems from unscrupulous contractors and attorneys cashing in on homeowners dealing with a water loss, such as a burst pipe or roof leak. The “bad actors,” as they have been dubbed by the industry, use an AOB to acquire the homeowners’ insurance benefits, file inflated claims, and then pursue lawsuits against insurers when those claims are disputed or denied.
Because of Florida’s one-way attorney fee statute, insurers are left footing the bill for the inflated claim and the attorney fees.
“We believe the [one-way attorney fee statute] provides an extraordinary incentive for people to get into a dispute with the insurance company and inflate the claim so the company has to pay attorney fees,” said Florida Insurance Commissioner David Altmaier at the Feb. 7 Florida Cabinet meeting.
The industry hopes this will be the year that the Florida Legislature addresses the problem.
AOB is such a hot topic in Florida right now that it dominated discussions on almost every panel and between attendees of the Florida Chamber of Commerce’s Florida Insurance Summit held Feb. 1-3 in Miami. A glance at the numbers from various Florida sources tells the story of why:
Citizens CEO and Executive Director Barry Gilway said the average water damage claim is received by Citizens 50 days after the date of loss.
“We are not getting these lawsuits from the insured,” he said. “In many of those cases we have never even seen the claim, we’ve never had an opportunity to adjust it or received a statement of loss… it’s just ‘here is a lawsuit and a bill for $30,000.'”
National homeowners carriers have also seen a significant rise in the abuse in Florida.
“Assignment of benefits started out as a convenience for Florida residents, allowing them to sign over the benefits of their property insurance policy to a vendor to facilitate direct payment for repairs,” said State Farm Florida Spokesperson Michal Brower. “However, it has become a vehicle for fraud and claim build-up by some vendors escalating the scope and cost of remediation or repairs beyond actual damage to the home.”
“The effect that assignment of benefits abuse is having on the property/casualty insurance industry in Florida is extensive and if not addressed will ultimately be devastating to consumers. The abuse is not only fueling the need by insurers to seek rate increases to cover rising claims costs, it’s also likely to affect consumer choices in the future, as more insurers are forced to consider leaving the areas where the abuse is the heaviest,” said Liz Reynolds, State Affairs Director, Southeast Region of the National Association of Mutual Insurance Companies (NAMIC).
According to the Florida Office of Insurance Regulation, nearly 73 percent of the rate filings received by insurance companies and approved by OIR were for a rate increase, largely because of AOB claims.*
Insurers are responding in ways other than raising rates, as well, including pulling out of certain areas of the state, filing for policy wording changes, and accepting fewer take-out offers from Citizens. The company has reached its lowest policyholder count in its history, but there are concerns those efforts will be reversed if the AOB problem continues.
Citizens’ Gilway has been one of the loudest voices in Florida on the AOB problem, first calling attention to the issue at Citizens OIR rate hearing in August 2015.
Gilway says as a non-profit insurer, Citizens is in a unique position to bring attention to how the problem is really hurting the consumer and not just a way for insurance companies to raise rates so they can make more money.
“I don’t have any axe to grind here. My bottom line is I feel very, very sorry for the insureds. They are getting ripped off by signing one of these things. Most of the time when they sign them, they are under duress,” Gilway said.
Florida insurance companies are just starting to quantify the AOB abuse and its impact on their bottom lines. The industry has seen increased water loss claims and litigation, but hasn’t necessarily been tracking the frequency of AOB with those claims. In OIR’s 2015 Data Call, only four companies were able to provide consistent indicators of AOB for the analysis.
Because private companies have not put forth concrete data like Citizens has, some have questioned if the abuse is as great as the industry has claimed.
Belinda Miller, chief of staff for OIR, said regulators have closely examined if the problem is an abuse of the system or if insurance companies are somehow complicit in the increased litigation. To reach that determination, OIR evaluated consumer complaints over the last five years and if they had increased at the same rate as lawsuits. Miller said that wasn’t the case.
“The argument that maybe it’s just the companies aren’t doing a very good job and aren’t paying when they should, we don’t see any evidence of that,” Miller said.
And as AOB costs insurers more money in claims, they can raise rates in response.
“Insurance companies pass through these costs,” said Miller. “The insurance company can raise rates and keep paying. It doesn’t necessarily mean they are going to make more money – they are going to pass these costs on to their policyholder.”
Friday, March 17 2017
Ratings company Demotech is holding off on issuing large-scale ratings downgrades of Florida property insurers for now, after a number of insurers heeded its warning of last month about the effects of assignment of benefits abuse and state court rulings by boosting their claims reserves and policyholder surplus.
After warning in February that at least 10 to 15 Florida property/casualty carriers would face downgrades if they did not take immediate action to shore up their reserves in light of deteriorating conditions in the state, Demotech said March 16 that, after working with insurers to make adjustments, it slightly downgraded only one carrier.
The ratings firm said it is also monitoring three insurers — Prepared, Mount Beacon and Elements— that have been or are in the process of being sold as a result of the situation in Florida.
Joseph Petrelli, president and CEO of Ohio-based Demotech, which rates 57 carriers in Florida and 397 nationwide, said his company worked individually with companies in Florida to analyze their financial standing, strengthen their claims reserves, and provide other guidance on what they could do to avoid a ratings downgrade. The result has been $355 million in additional reserves and policyholder surplus among the Florida carriers it rates, Petrelli said.
Demotech said last month that Florida’s property insurers are facing an “uncertain operating environment” as a result of the escalating AOB crisis that has caused the number of litigated water loss claims to skyrocket over the past few years, particularly for the state-run insurer Citizens.
As the abuse spreads from south Florida across the state, Florida’s private market insurers have also started feeling the effects, with some pulling out of areas of the state and filing for rate increases.
Demotech said AOB, as well as two court cases decided at the end of 2016 that reversed industry claims procedures have lead to unanticipated challenges for insurers. Demotech also warned about the effects of Florida Supreme Court decisions involving the reversal of claims procedures, protocols and practices as contributing to the state’s uncertainties.
“In an industry where past is prologue of the future, this is extremely detrimental to efficiently operating an insurance company,” Demotech said in its March 16 release.
In response to the events, Demotech last month withdrew its ratings guidance for Florida’s property insurance writers and undertook what it said was a “comprehensive effort” to review the financial statements and business models of 57 Florida carriers to “determine if they continued to meet or exceed the objective financial criteria associated with the assignment of Financial Stability Ratings (FSRs),” which reflect Demotech’s opinion as to an insurer’s financial stability and provide a baseline of the future solvency of an insurer.
According to Petrelli, Demotech advised carriers to take advantage of statutory accounting rules before Feb. 28 to infuse capital into their surplus to improve their year-end results and avoid ratings downgrades. Petrelli estimated that about 10 to 15 companies would face downgrades if they didn’t strengthen their claims reserves.
Demotech said March 16 that the carriers it reviews and rates in Florida responded by adding approximately $200 million in loss and loss adjustment expense reserves, as well as approximately $155 million to policyholders’ surplus (net worth) through capital contributions or operating results.
“This additional $355 million to benefit policyholders or claimants indicate the insurers’ recommitment to Floridians and financial stability,” Demotech said.
Demotech said that in certain cases, it also reviewed carriers’ rate levels for adequacy and found that “the overwhelming majority of the carriers reviewed appeared to have the situation under control.”
Demotech said that based upon its review of information including year-end financial statements, its interpretation of the deterioration of the operating environment in Florida, and discussions with rated clients, the FSRs of the carriers were affirmed as appropriate, saying “due to recommitments and recapitalization to meet the requirements of maintaining an FSR of A or better, downgrades have been largely avoided at this time.”
Only one company was slightly downgraded – Cypress Property & Casualty Insurance Co. was revised from A′ (A Prime) to A (Exceptional). Demotech said this move was made in part due to Cypress’ significant underwriting loss reported in 2016, but added “based on our interpretation of the current operating environment in Florida, FSRs above A are extremely difficult for Florida property writers to achieve and maintain.”
Demotech warned that in the long run, absent meaningful improvement in the AOB situation, it is likely insurers could face downgrades in the future, consumers may face higher and frequent rate increases, and investors who would otherwise capitalize or fund Florida-based insurance companies will deploy their capital elsewhere.
“Whether a property insurance carrier is privately-held or owned by a publicly traded entity, Demotech believes the primary focus of carriers should be adequate loss and loss adjustment expense reserves, realistic pricing in support of a business plan, along with a catastrophe reinsurance program whose horizontal and vertical protection addresses the needs of policyholders and investors by assuring, at a high yet reasonable level of maximum loss, the survival of the insurer,” the company said.
Demotech said it will not make any further moves until completing its reviews of carriers’ March 31 financial statements as well as its reviews of preliminary and final catastrophe reinsurance programs by June 1.
Demotech noted, however, that it is monitoring several other companies:
Elements Property Insurance Co. / Avatar
Mount Beacon Insurance Co. / Florida Specialty
Mount Beacon is a home and manufactured home insurance company specific to the state and is located in St. Petersburg. Florida Specialty said it will conclude the last part of its acquisition of the Mount Beacon Insurance Co. effective May 15, 2017 when all of the remaining Mount Beacon policies will be moved onto Florida Specialty paper.
Susan Patschak, CEO and Rick Loden, president/COO of Florida Specialty Insurance Co., are heading up the newly-acquired company. Before acquiring Safeway Property Insurance Co. (re-named Florida Specialty) in August of 2015, Patschak was formerly the CEO of Canopius Bermuda and Loden, president and CEO of Insurance Servicing and Adjusting Company located in Ft. Lauderdale, Florida. Dan Lavin is Florida Specialty’s Chief Underwriting Officer.
Prepared Insurance Co. / PLW Investments, LLC
“Is there an incentive in the market currently that entices people to abuse the system. We think that the answer is yes,” Florida Insurance Commissioner David Altmaier said in an interview with Insurance Journal. “The logical step, in our opinion, would be to take that incentive out of the marketplace.”
Public officials including Altmaier and private insurers are pressuring the state Legislature to act during its current session, which opened March 7.
“It’s going to be a hard battle,” Barry Gilway, CEO and executive director of Citizens, told the Florida Chamber of Commerce last month. “Let’s face it, the trial bar is extremely powerful and there’s absolutely no question they are going to fight this hard. They are going to fight anything that in any way shape or form impacts their ability to take on vendors as clients and eliminates any possibility for them to get fees.”
Monday, March 13 2017
A Canadian man lost much of his multi-million dollar car collection Thursday when the barn the vehicles were kept in caught fire, CTV News Calgary reports.
The central Alberta man lost farm equipment, trucks, and vintage cars-none of which were covered by any sort of insurance. The value of the vehicles lost tallied to more than $3 million in Canadian dollars, according to the collector.
It is what is, said Bert Curtiss to CTV News Calgary. I guess I've lost 45 years of work.
The 27,000-square foot barn that the cars were kept erupted into flames erupted Thursday afternoon. The cause of the fire has not yet been released. Officials said the fire may have started in a nearby garage, CTV News Calgary reports.
Some of these cars I've had for 40 years. [I've spent] hundreds of thousands of hours working on them," Curtiss said to the news station.
According to Curtiss, there were more than 40 classic cars and 40 collectible tractors in the barn when the took occurred.
Curtiss will probably not return to car collecting following this incident, he told CTV News.
Monday, March 06 2017
Progressive’s Flo Returns to Grab Business as Competitors Raise Rates
Progressive Corp., the fourth-largest U.S. auto insurer, boosted spending on marketing this year to win customers after scaling back in the second half of 2016 when increased costs from car accidents threatened the company’s profit goals.
“We’re excited to be back in, with full advertising,” Chief Executive Officer Tricia Griffith said Friday in a conference call discussing results at the Mayfield Village, Ohio-based company. Now is the time to highlight the brand because more drivers will be getting “rate shock” from rivals that are raising premiums, she said.
Insurers have been hit by higher-than-expected claims as more drivers take to the road and succumb to distractions, such as texting on their smartphones. State Farm Mutual Automobile Insurance Co., the largest company in the industry, said this week that it had a $7 billion underwriting loss on car coverage last year. Progressive has been an industry leader in gathering data on driving trends, and prides itself on being quick to raise rates when necessary, and then win market share when rivals follow.
Progressive, which relies on the charisma of its spunky saleswoman Flo, has gained 12 percent this year, the best advance in the the 21-company S&P 500 Insurance Index. The stock traded for $39.68 at 12:04 p.m. in New York, unchanged from Thursday’s close.
Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said in his most recent annual letter that the company’s Geico unit is poised to benefit from disruption in the industry. While some auto insurers may be reluctant to write more policies due to the unpredictability of the loss costs, Buffett said, Geico is accelerating new business efforts.
Buffett Makes Hay
“We like to make hay while the sun sets, knowing that it will surely rise again,” Buffett said in the letter posted online Saturday.
Griffith, who became CEO last year, highlighted Flo this week in a letter to shareholders, noting that she got a nod from hip-hop artist Drake in a Saturday Night Live appearance and was mentioned in a Stephen King novel.
“She represents what we strive to be for consumers — helpful, unique, and providing a product that is competitive,” Griffith wrote.