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April 16, 2012

Comments

Commercial Insurance Dallas

You make valid points. Your posts mention frequency of storms, but non mention severity of storms in relatively small areas like Florida and Massachusetts.

On that note, I would be interest what the claims models would look like if we simply removed the exposure for coastal catastrophes.

Insurance companies pay about 70 cents per dollar on average. Except, in the last few years, insurance companies have lost money for every dollar of revenue brought in.

Like you point out, 2010 and 2011 were bad years for catastrophes. As a result, reinsurance premiums were affected. Keep in mind, insurance companies have been affected by reduced investment gains.

Combine all those facts, and you get the perfect insurance storm. Insurance companies that want to grow are forced to tighten their underwriting belts. While on the other hand, rate increases are needed to maintain proper surplus ratios to maintain solvency and continue paying claims.

All that mentioned, it's a great time to be an independent insurance agent.

[Note from the Blog: Florida does not consider itself a "relatively small area," and the map reflects that it is either average or large, depending on your description.]

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