Monthly Archives: April 2012

The Week in a Minute, April 30, 2012

Well, 2½ weeks . . .

  • Insurance Information Institute, ISO and PCI pegged the 2011 combined ratio at 108.2, the highest since 2001, hurt by catastrophes and weak results on lines like workers comp. Return on average surplus was 3.5%, down from 6.6% a year earlier.
  • Capacity-challenged Florida’s Citizens Property Insurance plans to issue (via its dedicated reinsurer, Everglades Re) a $750 million cat bond for hurricane cover. That’s more than three times bigger than the insurer had announced and makes it one of the largest insurance-linked securities ever.
  • Q1 earnings season, with lots of focus on rate increases. Chubb reported 8% in commercial lines. Travelers reported the same 8%. At W.R. Berkley, 6.5%.

Math problems

This is from a study guide my fourth-grade daughter received:


The calculation error gives the teacher the right answer, instead of 1/24.

Normally, I give stuff like this a pass, since anyone can make a mistake. But this particular teacher is a math specialist, and it’s the second time a study guide has had both an error in arithmetic and algorithm design.


Insuring the Titanic

With the 100th anniversary of the Titanic’s sinking today, there’s a great post at Willis’ blog regarding the ship’s insurance placement:

The rate was 15 shillings per cent (0.75%), costing White Star Line £7,500 to insure each vessel. Today’s rates for a comparable risk would be significantly lower. More interesting, is the surprisingly high deductible of £150,000 or 15% of insured value. Deductibles on today’s largest cruise ships tend to be considerably under 1% of value.

More at the link.


The Week in a Minute, April 13, 2012

Lots of travel = not much blogging.

  • More signs of a tightening market: Willis marketplace update finds higher rates in North American property and casualty (while noting that $100 of risk in 2007 sells for $70 today – details here); Marsh reports property rates rising worldwide.
  • Worldwide reinsurer capital fell 3% last year, Aon Benfield says, citing catastrophes in Q1 2011 (Japan, NZ quakes and Australian floods). News story here, full report pdf here.
  • Goldman Sachs ratched up its insurance plans through its purchase of Ariel Re, completed Tuesday. They thus tempt the Agnes Rule (named for my Mom who coined it): Banks can’t sell anything but money. Hank Greenberg agrees with Mom.
  • New York has put p/c rate/rule/form filings online.

The Week in a Minute, April 6, 2012

  • Rates up 3% last month, according to MarketScout, following increases of 2% in February and 1% in January.
  • And Guy Carpenter said rates rose on reinsurance renewals at April 1, a big renewal date in the Asian markets, so any increases would be exacerbated by the brutal 2011 that region suffered.
  • $1.2B in March cat losses, thanks to tornadoes, Aon says. That, of course, doesn’t count this week’s Texas storms, from which State Farm has seen 9,000 claims – mainly hail.
  • Colorado State forecasters put numbers (pdf) on their prediction of a mild hurricane season: 10 named storms, four hurricanes, two major ones. They helpfully add: “Coastal residents are reminded that it only takes one hurricane making landfall to make it an active season for them.”
  • Zurich Financial Services officially changed its name to Zurich Insurance.