Yes, they underpriced business and had poor risk management. I think we all know that. But how did it happen? If you saw the recent Wall Street Journal article, you know that a state manager chose to prioritize making the agents happy over making State Farm money. This led to Continue Reading
The California Fires And What Comes Next
As some of you have speculated, I had been planning to write about the California FAIR plan for quite some time, but never quite got around to it. That, unfortunately, is the downside of subscribing to a free newsletter. I have no market incentive to publish in a timely manner! Continue Reading
Predicting the Everest Reserve Charge
One of the big stories to watch for year end earnings will be how many companies will confess that their casualty reserves are still woefully short. There doesn’t seem to be a whole lot of angst about this, even after the large Swiss Re charge last quarter. Just because management Continue Reading
The Evolving Terror Liability Risk
While it may be too soon to talk about the insurance impact of tragic events, that is what we do in the insurance industry. So, hopefully you will understand my attempt to be clinical here and make some observations about the recent terrorist attacks. The recent spate of car based Continue Reading
The Biggest Misunderstanding About Your Health Insurance
I’m going to go a little bit outside my normal insurance domain to address a topic that has received a lot of attention of late – corporate health insurance. Most people I speak to have a fundamental misunderstanding about how their health insurance works. If you have employer provided healthcare, Continue Reading
Allianz’s Foolish Bitcoin Bond Buying
Did you know Allianz is at the center of the biggest racket in financial markets since AIG was insuring mortgage CDOs? Some of you are probably familiar with MicroStrategy. They are the software firm led by Michael Saylor that morphed into a Bitcoin hedge fund (that doesn’t hedge!). After Satoshi Continue Reading
The Greater Fool and the Persistence of Irrationality
This is going to be a bit nerdy, but hopefully it’s insightful. Probably the biggest difference I have seen between economic theory and reality is the lengthening of lags across the economy and markets. What do I mean by that? I mean if theory predicts it might take one year Continue Reading
S&P 6000: Irrational Exuberance
WARNING: I am not saying sell stocks today! It was over three years from Greenspan’s irrational exuberance speech until the top of the market. Rather, I am expressing the need for caution as you think about future stock returns. I have no idea when the top will come or how Continue Reading
Understanding Political Betting Markets
First off, this post is not pro either candidate. If you read it as such, it’s your bias, not mine. Truth is, I am anti both parties. Today’s topic is one that has received a lot of attention of late – political betting markets. I thought I would use some Continue Reading
Hurricane Milton – The End of the Florida Insurance Experiment?
I wanted to write some initial thoughts based on what we know at the moment. Obviously, this is a fluid situation and predictions can change between now and landfall. I am going to assume for this post that Milton is a strong 3 hitting near Tampa, going through Orlando as Continue Reading