CompleteMarkets
Latest insurance industry news, with commentary.
NEWS OF THE DAY February 14, 2014
QUOTE OF THE DAY:

“Love is more easily demonstrated than defined.”
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GOOD NEWS!

P/C INSURERS’ NET INCOME UP 60%, COMBINED RATIO AT 97.6 FOR 2013: A.M. BEST

Insurance Journal

2/12/ 2014

A relatively quiet year for catastrophes helped the U.S. Property/Casualty industry achieve an underwriting profit for the first time in four years, according to A.M. Best.
The industry managed its way to a nearly 60% increase in net income to $63.2 billion, which helped drive an estimated record year-end surplus of $666.3 billion. The surplus level is “particularly noteworthy given the headwinds that are anticipated in 2014,” A.M. Best said.
In a special report, the ratings agency said underwriting results reached their best level since 2007 and the industry’s combined ratio for the year is expected to come in at 97.6.
The estimated underwriting profit of $8.5 billion for 2013 ranks as the third best in the past decade— next to $28.9 billion in 2006 and $23.0 billion in 2007. In 2012, the industry suffered a $12.5 billion underwriting loss.
The drop in catastrophe losses shaved 4.3 points off the industry’s expected combined ratio in 2013. While cat losses represented 7.5 points on the 2012 combined ratio, they dropped to 3.2 points in 2013. Unlike Superstorm Sandy in 2012, no major storm made landfall in the U.S. last year.
However, A.M. Best Co. is estimating a “more normal level of catastrophe losses” in the coming year.
Profitability for 2013 was further bolstered by considerable investment gains achieved in strengthened U.S. equity markets, the report said. Net income is projected to be $52.9 billion, a 7.9% increase over last year.
Additional highlights from last year’s performance include a 4.8% increase in net premiums written. Workers Compensation was again the fastest-growing line with a 9.7% increase.
Looking ahead to 2014, A.M. Best said it expects premiums to continue growing through price increases –but the pace of these rate changes should slow and temper growth in premium.
Although core accident-year underwriting results should improve slightly on the rate level achieved in recent years, A.M. Best said it anticipates less favorable development of prior years’ loss reserves.
In addition, the report says the P/C industry will continue to be challenged by the relatively low investment yields that are expected to persist through 2014, and the slow recovery from the recession of 2007-2009.
A.M. Best has assigned stable outlooks to both personal lines and reinsurance.  However, it has assigned a negative outlook to commercial lines, citing a highly competitive market, expected low investment yields and the potential for future adverse development of loss reserves.

PROPERTY/CASUALTY PRICE HIKES EBBED IN FOURTH QUARTER: CIAB

Business Insurance

February 11, 2014 -

Last year ended with a slight slowdown of Commercial Property/Casualty insurance price increases, according to the Council of Insurance Agents & Brokers’ quarterly Commercial P/C Market Index Survey, released Tuesday.
On average, prices rose for large, medium, and small accounts at a rate of 2.1% in the fourth quarter of 2013, compared with 3.4% in the third quarter of 2013, according to the Washington-based council’s survey.
In general, the larger the account, the smaller the rate of increase: Large accounts reported average increases of 1.4%, while small accounts registered average 2.6% increases, according to the survey.
“We didn’t see any significant changes last quarter, which is not surprising,” council President and CEO Ken A. Crerar said in a statement.
“Underwriting seems to have remained disciplined,” he said. “It appears that new capacity in the market, such as the arrival of Berkshire Hathaway Specialty Insurance, helped dampen pricing a bit last quarter. That, and the fact that catastrophe exposures were low, added up to a more stable pricing environment overall

A VALUABLE GRACE PERIOD

HEALTH CARE REFORM MANDATE DELAYED YET AGAIN

Live Insurance News

2/12/13

The White House has = put off employer fines until 2016 after continued rollout struggles of the Affordable Care Act..
According to the latest delay, the majority of employers will still not face fines next year if they don’t  offer insurance benefits to their employees, .
Businesses with 50 to 99 full-time employees will not be required to comply with the mandate requiring them provide insurance. After the new date, if they fail to offer this coverage to their workers, they will be required to pay a fee.
Companies with a larger number of workers will also be able to avoid some health care reform penalties.
If they have more than 99 full-time workers and can show that they have offered coverage to at least 70% of them in 2015, they will be able to avoid paying some penalties.
The decision was made by under pressure from employers to change or soften the requirements,A growing number of businesses had been cutting back the hours of their employees to less than 30 per week (thus converting their workers into part-time employees) so that they would be able to avoid having to pay a fee for failing to offer coverage.
The 2010 health care reform law originally stated that employers with a minimum of 50 full-time employees would need to offer those workers coverage starting in 2014 or face a fine that starts at $2,000 per employee and rises from there. This mandate was delayed last year, bringing it to 2015; but now the rules have been changed again to push it to 2016.

HIGH-TECH INSURANCE

INSURANCE COMPANIES COULD BE THE DRIVER GOOGLE GLASS NEEDS

Live Insurance News

2/7/14 

Today, the primary demographic for the augmented reality Google Glass eyeglasses is wealthy techies who aren’t worried about how they look wearing nerdy looking sci-fi style glasses in public. However, this trend could turn around as insurance companies begin to cover this product. 
Google has a partnership with VSP, the largest optical insurance company in the U.S, that will allow people to receive an eye exam from a VSP-certified optometrist at a discount and buy a pair of prescription augmented-reality glasses 
Whether this trend takes will depend on how many people see the discount as  an incentive to buy this technology. 
VSP policyholders will be able to choose from four new styles of subsidized, prescription augmented-reality frames.

Jack Nordhaus
Other articles by: Jack Nordhaus
Categories: General Information, Technology
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