Where am I?

Kinda busy, which is good – it keeps the cats in kibble. But kinda bad for blogging.

I covered parts of the Spring Meeting for the CAS, including this look at the Florida homeowners market:

Exposed to devastating hurricanes and a surprising influx of sinkholes, Florida may have the most challenging market for homeowners insurance in the nation, panelists told attendees of the Casualty Actuarial Society Spring Meeting, held May 15-18, 2011.

Actuaries saw the gamut of the market’s challenges during a discussion of “Florida Homeowners: A Study in Contrasts.”

A panelist from the state’s largest insurer said his company wanted to shrink. Another, from one of the state’s smaller insurers, wants his company to grow. Both agreed the market is an extraordinary one to negotiate.

Writing that article made me realize that I haven’t been clear on my take on FL homeowners. I’ve been critical of Citizens – the state insurer – and some of the smaller takeouts. But I may not have been clear that Citizens, as insurer of last resort, faces enormous challenges, some of which are presented by the politicians who master it.

And the smaller companies face a tough squeeze between the rate regulation that hampers their ability to write freely and the reinsurance market, which requires 40% of gross premium just to meet its cost of capital.

I also attended a CAGNY meeting and an Advisen Casualty Insights Conference last week.

Most interesting from the Advisen meeting: Moody’s analyst Alan Murray noted that his firm’s 12/2010 analysis showed overall p/c reserves as barely adequate, with redundancies in personal lines (as always) and medical malpractice and deficiencies in other casualty lines.

This week: the CAS Seminar on Reinsurance in Philadelphia.

And somewhere in between, I went kayaking with my daughter. There I met a risk manager from Goldman Sachs who told me his hours weren’t that long: “I start at 8 in the morning and work till 8 in the evening. But it’s not like I work weekends or anything, like some guys do.”

He confirmed some of the stuff I’ve read about Goldman’s ERM – that it is fully integrated into the company. The head of ERM has immediate access to the top players in the company. And people who want to advance at Goldman generally need a stint in ERM. Not bad for vampire squids.

Soooo . . . with all the travel, I’m working through the backlog.

At the same time, there hasn’t been a lot in the news. Generally, I try to respect everyone’s time, blogging only when I have something to add to the conversation. Otherwise, I tweet headlines @jimlynch9999, which I summarize weekly.

Actuarial Opinions is also on Facebook.

In other non-news: I try to follow rates, and MarketScout came out with a new survey, but I’ve been reluctant to touch on it, since the survey’s results don’t seem to hang together.

For example, the overall survey says overall rates are down 4%, but rate change by coverage shows nothing falling by more than 3%. I’ve been trying to reach the MarketScout folks, but they haven’t responded to my humble blogger emails, which may well be trapped in MarketScout’s spam spiderweb.

Then there’s the June 1 renewals. There I tweeted pretty much the lay of the land:

StrategicRISK – Rates stay low despite catastrophes http://ow.ly/5e2CR || Contrast with GC’s view: http://ow.ly/5e2Fl

In other words, Willis seems to say low rates, while GC gives a mixed view on Florida renewals:

Depending on the method used, the price change in Florida could be reported anywhere from down 15 percent to up 10 percent.

. . . which sounds to me like rates are higher in an absolute sense, but since RMS11 boosted the risk of hurricane, they are lower per true exposure. Like if you have an auto accident, your insurance rates go up, but your risk profile has gone up as well. So your rate per true exposure might drop, even as you pay more.

Meanwhile, I’m hearing casualty rates continue to decline. Update: Like I said.


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