Risk & Business

Hurricane Sandy spared Delaware from it's worst ingredients. By the looks of things , New Jersey and New York got the brunt of the wind and waves. Again it is time for our industry to do what it does best, put lives back together. I can assure everyone reading this blog that the insurance industry will respond and will put life back together for those victims of the storm. This will happen even amoung the constant dislike most people have toward paying insurance. While the industry is paying claims in the Northeast, people all over the country are cursing at the thought of making another premium payment. It is the intangible nature of insurance that causes this. Paying for something that you very rarely use is against most peoples fiscal judgement. It is only until a storm like Sandy rolls around that people really appreciate the insurance industry. I am proud to work in this field and I know the Northeast will be back on its feet in no time thanks to insurance. Until next time be

I stopped by one of my clients the other day to talk about his risks. In the conversation he tells me about a product line they have been selling that has gone wild. He said that the new product has accounted for 50 percent of their sales this year. When I inquired some more I found out that they buy the product from a Japenese manufacturer. Now this started my risk radar. I also discovered that there is no other manufacturer of this product in the world. So what happens if the manufacturer goes belly up? What happens if there is a Japanese earthquake. What happens if the supply is stopped? This is supply chain risk and it has become more prevalent today than ever before. Every business today has some supply chain risks that could dramatically affect their business. Business owners should talk to their risk professionals on how to mitigate this risk.  It certainly shows how changes in the world markets affect even small businesses in small towns. Until next time be careful out there an

After rousing everyone with the announcement of a 40 percent work comp rate increase, the DCRB and the Dept. of insurance have postponed the hearing date. The previously scheduled hearing was Nov 2nd. Now the hearing has been set for after the election. This has raised some questions amoung my business clients. Why?  Maybe the reason is that the increase could affect the outcome of the election. Yes, a work comp rate increase of this magnitude could have devastating economic results for Delaware. I think most in the political circles understand this. Stay tuned Delaware  !   G. Kevin Nemith. Small Business and Business Insurance Specialists serving Delaware, Maryland, Pennsylvania, NJ, and Virginia.

A few years ago Nationwide bought Harleysville Mutual Insurance company. The deal which gave current shareholders a nice gain , was said to have dealt some unfair cards to the mutal policholders whose only prize was to become Nationwide policy holders. Well as you can guess, a class action law suit was filed. Today it was announced that Nationwide settled the suit for 28 million. They stated the settlement was not an admission of doing anything wrong, but was to avoid costly litigation. What now?  Does the law suit stifle future mergers or aquisitions of stock companies buying smaller mutual companies? Will mutual policy holders have a stronger voice in these deals with a fresh case precedent in the books. Does this create a marketplace ripple which has been an increasing shrinking of the insurance company landscape?  My thoughts on this is , "no". No matter the law suits that may come, my prediction is an increasing activities of bigger stock companies buying the customer an

I have been scrambling to touch base with all my clients informing them about the proposed 40+ percent work comp rate hike in Delaware. In those conversations my clients are all asking the same fundemental question, "why"?  My belief is that a perfect storm has hit the Delaware work comp market. Back in 2007 the state passed a work comp reform bill that was to reduce medical costs. The problem has been there was no real way to assure that the doctors and hospitals would follow the fee schedules. Also the recession took a lot of workers out of the work force that have slowly been hired back. This is causing an uptick in claims. The rate roll back forced by the Chancery court in 2008, took to much premium out of the system, to fast. As claims costs rose and premiums fell, an unsustainable path was created that lead us to where we are today. Finally, the insurance companies have not been making as much profit in their investments. They are looking to increase rates across all li

If Congress does not act, then US taxpayers will see some of the biggest tax increases in the history of the country after Jan. 1st. Business owners, especially small business, will see the majority of these increases. These taxes could have a direct impact on insurance premiums. If small business is hit with increasing taxes and increasing premiums at the same time then something is going to give. My guess is taxes will get paid but premiums will not. Coverage may be reduced by business owners also. The insurance industry needs to realize that the pending fiscal cliff would hurt their primary source of income which is premium payments. I would imagine there are numerous insurance CEO's calling their congressmen as we speak.  Until next time be careful out there and know your risk. G.Kevin Nemith, Business insurance and small business insurance specialists, serving Delaware, Md, NJ, and Pennsylvania. www.cncinsurance.com www.bizinsurancetv.org