Insurance Industry News and Media Coverage
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It's official. By formally closing the deal
on Safeco, Liberty Mutual is now the country's fifth largest
property-casualty carrier in the U.S. with more than $32 billion in
direct written premium based on 2007 results for both companies. But the
transition is about more than just bringing Safeco into the fold of
Liberty Mutual's Agency Markets business unit, says Gary Gregg,
president of Liberty Mutual Agency Markets. The new Liberty Mutual
Agency Markets will provide its products and services through three
major operating units and a specialty company: Regional Companies
Group—Commercial Lines, Safeco Personal Lines, Liberty Mutual Surety and
Summit.
The leadership of the Independent Insurance
Agents & Brokers of America (the Big "I") does not believe that the
American International Group's (AIG) recent problems will have a domino
effect on the entire insurance industry. The Big "I" also concluded that
the Federal Reserve's decision to lend up to $85 billion to AIG is
appropriate in the face of the escalating concern about the potential
impact of AIG's economic challenges.
This year is on pace to be one of the most
costly in two decades.
Earlier this year, ISO's Property Claims Service identified the first
quarter of 2008 as the most costly in terms of catastrophes for 10
years. Forecasters estimated damages of $3.35 billion in 22 states due
to one severe winter storm, seven tornado/thunderstorms and one workers'
compensation catastrophe. That unfortunate start to the year was then
nearly doubled by the end of the second quarter with total catastrophe
losses estimated at $6.05 billion through six additional catastrophes
now affecting 27 states.
Missouri Workers' Comp Penalties at All Time High |
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The
Missouri Attorney General's office recently released a statement saying
that a record number of Missouri businesses were ordered to obtain
workers' compensation insurance in 2005. According to the Attorney
General's office, 362 businesses were forced to comply with the law in
2005, up from 148 in 2004. Those companies not in compliance with the
law were ordered to pay a record $755,000 in penalties, up from $557,000
in 2004. Missouri state law mandates that businesses with more than five
employees or construction companies with one worker or more to carry
workers' compensation insurance.
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Hurricane Losses to Top $57 Billion |
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New York-based Advisen
Ltd. has estimated that worldwide insurance and reinsurance losses
related to the three major hurricanes that hit the United States this
year, would amount to $57.6 billion, making the cumulative catastrophe
losses the largest on record. Since mid-October, Advisen has calculated
current after-tax totals per hurricane as follows: Katrina, $28 billion;
Rita, $4.5 billion; and Wilma, $4.8 billion.
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Man Buries BMW to Collect
Insurance Money
RAVENNA,
Ohio - A man facing a big bill because he had blown the
engine in his 1997 BMW decided to bury his car instead and
collect $20,000 from his insurance company by claiming it
was stolen.
Matthew
Mueller rented a backhoe in October 2002 and buried the car
on property owned by his father in rural northeast Ohio. Police received tips last year and
excavated the vehicle. Mueller, 35, of
Akron, was sentenced to a year in prison for
insurance fraud, tampering with evidence, falsification and
receiving stolen property. He apologized in
Portage County Common Pleas Court
on Tuesday and paid restitution to Progressive Insurance
along with $15,500 to state officials for their costs
digging up the vehicle. "It was stupidity and
completely out of character," he said. "I broke the law and
I tried to conceal it."
Insurance Institute’s Top 10 Safest Cars
Large Cars
Gold: Ford Five Hundred/Mercury Montego (Twin Vehicles)
Silver: Audi A6
Midsized Cars
Gold: Saab 9-3, Subaru Legend, Audi A3 and A4, Chevrolet Malibu (with optional
side airbags), Volkswagen Jetta and Passat
Small Car
Gold: Honda Civic 4-door
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INSURER TOLD TO PAY $8 TO MISSOURI
COUPLE ACQUITTED OF FRAUD |
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State Farm Insurance has been ordered to pay more than $8 million to a
tow truck driver and his sister-in-law who were acquitted of insurance
fraud after being accused of faking the theft of a vehicle. Jackson
County Circuit Judge Charles Atwell said he would award $4.5 million to
Jennie Hampton, of suburban Olathe, Kan., owner of the Toyota 4Runner
reported stolen in 1997, and $4.2 million to Marvin Vail, 33, of
Edgerton, Kan. The award Atwell ordered also included an adjustment to
account for the settlement with the National Insurance Crime Bureau.
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MISSOURI MED-MAL AWARDS
UP IN 2005 |
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The
average award per medical malpractice insurance claim in Missouri rose
in 2004, but payments by hospitals declined, according to a newly
released 2004 Missouri Medical Malpractice Insurance report. The average
award per claim rose, for the third straight year, to $252,666, up from
$212,066 in 2003. Average payments for physicians and surgeons reached
$287,733 in 2004, according to the St. Louis Business Journal.
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Lloyd's Estimates $2.85
Billion WTC Loss
Wed Apr 10,10:39 AM ET By
Clelia Oziel, UK financial services correspondent LONDON (Reuters) - Lloyd's of
London insurance market on Wednesday raised its estimated net loss from the
attacks on the World Trade Center to $2.85 billion, from an earlier $2.73
billion forecast. Its estimated losses from the Sept. 11 attacks are already its
biggest ever from a single disaster and Lloyd's projected its 2001 loss would be
$2.2 billion, calculated using its usual three-year accounting method. Lloyd's
reports its results three years in arrears because some insurance claims take a
long time to settle.
Using one-year accounting for the first time, the pro forma loss for 2001
was projected to be $4.5 billion, reflecting the entire World Trade Center loss.
Under three-year accounting, the burden of claims is spread over a number of
years, whereas they are written off as they become known in one-year accounts.
Lloyd's, which was founded three centuries ago in a London coffee house, said it
had already paid out $900 million by the end of March to cover losses from the
attacks in New York.
The insurance market must also
pay claims for 13 other catastrophes last year, including the loss of a
Petrobras oil rig off Brazil and tropical storm Allison, which tore through the
east coast and mid west of the United States. Lloyd's said barring any new
catastrophes, it expected to swing into profit in 2002. "Capacity is at an
all-time high and we are seeing significant improvements in trading conditions
across all lines of business," Lloyd's Chief Executive Nick Prettejohn said. He
said the last six months had seen premium income increase an estimated two
thirds over the same period a year ago. "These increases give us confidence that
2002, in the absence of any extraordinary catastrophes, should see the return to
profitability for the Lloyd's market," Prettejohn said. ($1=.6960 Pound) |
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State Farm Posts $5 Billion Loss for
2001
Fri Mar 1,11:59 AM ET
BLOOMINGTON, Ill. (Reuters) - Insurer State Farm on Friday posted a net loss of
$5 billion for 2001, hit by claims and sharply lower capital gains. The
Bloomington, Illinois-based insurer, which earned $400 million in 2000, also
said its premium revenues rose to $40 billion last year from $37.6 billion in
2000. Many U.S. insurers suffered losses last year on claims covering the World
Trade Center disaster, bankrupt energy trader Enron Corp. and Argentina's
battered economy. A stock market slump also hurt insurers' investment
portfolios. Realized capital gains fell to $300 million from $3.4 billion in
2000, State Farm said.
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MetLife to take
$250 mILlIOn charge to
settle race suit
NEW YORK, Feb 7 (Reuters) -
MetLife Inc., the No. 1 U.S. life insurer, said on Thursday it was setting aside
$250 million to settle a class action lawsuit, and possible fines from
regulators, arising from charges that it sold small life insurance policies to
blacks at higher prices than whites. The size of the charge -- which MetLife
said would be taken in its fourth quarter 2001 earnings, due to be released next
week -- suggest that MetLife's settlement will be the largest on record in a
race-based pricing case. Two years ago, American General, now part of American
International Group Inc., paid out $215 million in compensation and fines over
the same issue. ING Groep's Life Insurance Co. of Georgia is also close to
settling a similar case, which could cost up to $60 million, sources close to
settlement talsk say. The practice of selling small-value life policies --
sometimes known as industrial life insurance or burial insurance -- to black
policyholders at higher prices than whites, was widespread in the industry up
until the 1970s, and survived to the late 1990s in some areas of the United
States.
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Consumers Prefer an independent agent According to the Future One 1998 Personal Insurance Policyholder Study, a
study of 1,623 clients found consumers overwhelmingly value local agents and the services
they provide. 51% of respondents rated "having someone who represents my
interests" as very important. Other top priorities of consumers was the ability
to speak with someone familiar with their account, someone who can analyze their insurance
needs and find the best coverage, the ability to meet face to face with an insurance
expert, someone to choose a company with the best price, someone to choose the best
insurance company and the ability to choose among multiple companies presented by a single
agent.
- Consumers value agents, study reveals, Independent Agent Magazine,
January 1999
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April 10th storm results in record losses Preliminary estimates from the top five largest auto insurers in Missouri reveal that losses from the April 10 hail storm that hit St.
Louis and surrounding areas of Missouri will exceed $220 million, according to
the Missouri Insurance Information Service. A combination of tornadoes and
hailstorms roared across the midsection of Missouri causing significant damage
to cars and home. While high winds and heavy rain hit St. Louis, the major
damage in north St. Louis County resulted from reports of baseball-sized hail.
It is estimated that over 90,000 claims are to be filed resulting from the
storm. When all is said and done, we expect April 10, 2001, to be categorized as
the largest property and casualty catastrophic loss in Missouri history.
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