Risk & Business

According to a recent article in National Underwriter, www.propertyandcasualtyinsurancenews.com, anti-fraud organizations representing sectors of property and casualty insurance and health insurance are combining efforts to combat fraud. This is good news for small business owners who are annoyed when their insurance companies pay for what they consider illigitamate claims. Not only are insurance rates affected by the number of claims paid out for possible fraudulent activities but individual insured's loss histories are negatively impacted as well. As many of you might know, every claim paid out by your insurer is recorded by them and provided to any future insurance company you wish to do business with. Hopefully this is a sign of future proactive and aggressive attention to this area by insurance companies.

With the spotlight currently focused on the subprime mortgage crisis and with many prior examples of securities debacles, think Enron, it's interesting to note that insurance entities are starting to explore opportunities into this historically untouched area of investment for them. According to their website, Lloyds, www.lloyds.com, one of the largest world players in the insurance and reinsurance market, "Convergence between the capital and insurance markets is gaining pace and Lloyd's insurers are at the forefront of developments". They have formed an investment management company that will specialize in traded insurance risk. With the global industry as a whole having an extremely profitable run the past couple years due to the low incidence of insurance related catastrophes, combined with a successful run of investment profit in the stock markets, they are now exploring new ways to broaden their earnings capacity. While at face value this looks much like many...

It's that time of year again, hurricane season is upon us. According to the National Oceanic and Atmosperic Agency (NOAA) website, they are predicting a 90% chance of normal or above normal activity in the Atlantic this year. Their definition for normal or near normal is a range for major hurricanes at 1 to 3 for the season. Their definition for above normal is a range between 2 and 8 major hurricanes. The reason I bring this up is the fact that many business owners located at or near the shore, or in designated flood zones, aren't currently carrying flood insurance. While not intended to scare you, it's important to realize that your current property/casualty insurance does not cover you in the event of flooding. Take a look around your building/facility, is most of your stock and or equipment, located in an area accessible to water in the event of flooding conditions? Can you afford to self insure this material in the event of a major weather event? You may be sur...

Interesting article I ran across. Seems that with the increased gasoline costs, motorists are driving less, thereby decreasing accident rates. An analyst at Lehman Brothers upgraded major personal auto insurer Progressive Corp. as an investment due to this trend. With the recent trend of insurers decreasing their rates to win business, this would be a welcome sign for them to increase profit margins. The story stated that in the 70's, when gasoline prices increased substantially, the same trend occurred.

Those of you making the decision on purchasing commercial property and liability coverage for your business are probably enjoying the current climate in the pricing of your commercial insurance coverage. We are in the midst of a "soft market" in commercial insurance pricing and it's only makes financial sense to place your coverage with a carrier offering competitive pricing. Let's keep in mind that the lowest price isn't always the best deal. Make sure to examine carefully the alternative proposals you are receiving to make sure they match up with the coverage you currently have. Keep your agent/broker honest by insisting on no shortcuts in achieving pricing cuts. You should definitely take advantage of the pricing climate that is currently occurring. Just make sure you are still enjoying the same level of coverage you had before with the lower premiums you are now paying.

I have heard from time to time while visiting clients and new prospects that they are in need of someone to help them with their safety management program. While most agents are more than capable of providing safety management services for their clients, not just including their access to the resources provided by the companies they represent, it is important for the insured to make sure they do their part also. Many aspects of an insureds operation are unknown to the outsider coming in to make an assessment, such as the agent or company loss control personnel. While many businesses more or less operate in the same manner as many of their counterparts in related industries, many are set up and run in a variety of ways unique to their own unique requirements and owner related priorities. It's important to review your procedures/processes from top to bottom and share as much as you can with your agent and insurance company loss control personnel. If you suspect a procedure or p...