Auto Industry is Hurting Folks. How Are You Feeling It?

[Matt37]

Our P&C ops people say it's to have a better draw to the homeowners market to allow bundling. Country was -2% in our state, but Home was very profitable.

Yup.. and that's about the only reason.

I stayed in FL as long as I could because the wind hasn't blown for a while and even though reinsurance costs eat up a lot of your profit you can still push rate on property and make money... but in 2013 I got a "nasty gram" from Jeff Atwater and the FL DOI telling us to write all lines or get out..

So I left the state .. I have interest in FL property but I don't want the auto

 

[nyc2phi]

might be a dumb question...but if carriers aren't making money then why are they in those states?

Most don't, a lot of carriers you write in PA won't touch NJ. Same with DE. States like NY can be profitable upstate but unfortunately they can't red line a state.

 

[AZDave]

Write statutory limits and you are good to go

That's what we did in FL when our book was struggling.. 10/20/10, no UM... I'll do that all day.


This business is so much fun! Women don't even cycle as much as insurance companies loss trends cycle. Hot/cold.

In 1986 American Family expanded operations into AZ. I was the 11th agent appointed with them. They offered a "Gold Star" policy which included limits at 100/300, med pay 10k, matching um/uim. They gave agents extra 'points' for selling the policy. At the same time had ridiculous pricing. 100 apps per month was expected and rewarded with a stupid plaque. So many apps, then the claims came rolling in, and AMFAM learned AZ is a non cancellation state.

A few years later came the "write to the risk" program. No more mention or reward for gold star auto, but just the opposite. Write state minimums, don't give 100/300 unless they have it already. Monthly meetings turned into guilt sessions of loss ratio's and agents were to blame. Their way to stop the losses were to lower the limits.

Profit years finally came, and then they had contests and gave extra rewards for writing Umbrella's. Go figure. After huge rate hikes, retention sucked, and that was their answer: lock in retention with an umbrella.

And I'm not sure what this has to do with the cost to fix a 2016 Acura...

 

[AZDave]

Same Car, Same Accident. EVERY Carrier is Feeling it!

2014 Acura and a 2016 Acura.
Cost of Claim 100% more than the 2014 Acura.


Frequency is up given, cheap gas and distracted drivers

Severity is through the roof because the same fender bender is now 100% more expensive than it was before because the bumper now has 10 sensors in it and a camera. and can park itself.


Industry is hurting. How does that play out in your agency?

It's been a long time but Shawn Michael Walker is Back Baby!

Shawn;

Did you write this for State Auto? !

Effective date 3/17/2017

Rate adjustments

"Like much of the industry, we’ve experienced elevated loss trends prompted by customers driving more, increases in distracted driving, inflation in medical costs and the cost to repair increasingly complex vehicles....."

State Auto keeps hitting rate here, but my other carriers are holding to only small adjustments, for now anyways.

Some companies are having way more problems than others.

Dave

 

[Matt37]

Shawn;

Did you write this for State Auto? !

Effective date 3/17/2017

Rate adjustments

"Like much of the industry, we’ve experienced elevated loss trends prompted by customers driving more, increases in distracted driving, inflation in medical costs and the cost to repair increasingly complex vehicles....."

State Auto keeps hitting rate here, but my other carriers are holding to only small adjustments, for now anyways.

Some companies are having way more problems than others.

Dave

I just reviewed a few reporting recently released.

State autos combined went from 101.5 year end 2015 to 106.1 year end 2016.

Net income went from $51.2M year end 15 to $21.1M year end 16.

State Auto needs to stop writing trash and focus on casualty driven biz.. not auto.

 

[shawnmwalker]

Auto Industry projected to run a 107 on 2017. Industry is not supposed to be profitable in Auto in 2018 as well.

If State auto is a 106.....

This thread is not about state auto. it is about the auto industry. No carrier is not feeling it.


I do hear State Auto is Nailing AZ pretty hard....

 

[Matt37]

Auto Industry projected to run a 107 on 2017. Industry is not supposed to be profitable in Auto in 2018 as well.

If State auto is a 106.....

This thread is not about state auto. it is about the auto industry. No carrier is not feeling it.


I do hear State Auto is Nailing AZ pretty hard....

I know .. I just like to reitierate how poorly run State Auto is.

And not every carrier is running a fever of 106..

 

[insurance1822]

^Am I the only one who picks up on this Matt37 here? "running a fever of 106" and "focus on casualty driven business" (still don't know what that means.)

What's your history? How high of a product guy were you? Were/are you an actuary? Here's how I see it using the military analogy

Me - GRUNT. I kick in doors & light up insurgents

Sean - DIPLOMAT - Shows up in a suit telling us the overall mission is to spread democracy.

Matt37 - ??????? - CIA? NSA? Suppressed weapon, full beard..

 

[VolAgent]

^Am I the only one who picks up on this Matt37 here? "running a fever of 106" and "focus on casualty driven business" (still don't know what that means.)

What's your history? How high of a product guy were you? Were/are you an actuary? Here's how I see it using the military analogy

Me - GRUNT. I kick in doors & light up insurgents

Sean - DIPLOMAT - Shows up in a suit telling us the overall mission is to spread democracy.

Matt37 - ??????? - CIA? NSA? Suppressed weapon, full beard..

I assumed he was an actuary or product manager (not sure on the term). Basically making decisions on what to offer and where.

 

[InsCommentary]

Who would waste money on disability insurance? I've never met anybody that was disabled before. I'm not even sure how one suffers a disability anymore? We've cured all the big diseases I think and accidents don't happen.

One thing good plaintiff's lawyers are asking today in agent E&O cases is whether the defendant posts about insurance on social media, blogs, or other web sites. Then they peruse these platforms for statements that support their cases. Things like not recommending certain types of coverage.