Last week, I wrote about current aggressive accounting practices. This week, I’m going to write about future aggressive accounting that will be practiced. How can I so confidently predict the future? I’ve been doing this a long time. Some things are easy to forecast. What’s the accounting treatment I will Continue Reading
The Era of Reserve Releases Has Ended
The Axis and Markel reserve charges over the last week weren’t the first of this cycle and, most assuredly, won’t be the last. But I do think they serve as something of a marker. We have gone through a generation of reserves nearly always being favorable. That time appears to Continue Reading
Decoding Insurer Speak
One of my main roles as an investor was trying to assess the difference between what companies said and what they were actually telling you with their actions. Company scripts for investor calls rarely directly answered your questions. I had to read between the lines or listen for what was Continue Reading
IAN’S ALERT: The McKinsey Opioid Settlement
We haven’t done an IANS ALERT in a long time. If you’re unfamiliar, IANS stands for “incurred and never spoken“, i.e. the future reserve charges management knows about but the actuaries aren’t made aware of yet. When Stephen Catlin talks about $200B reserve holes, he is sounding the alarm on Continue Reading
Why the Polls Were Wrong and What We Can Learn From Them
As of the moment I write this, we don’t know who will be the next President and probably won’t for a few days. What we do know is the projection sites and the state polling were off base again and the election was much closer than anticipated. For example, using Continue Reading
Where Are All The Reserve Charges Hiding?
One thing I like to do here is make predictions. When those predictions come true, I am pretty good at reminding you about it! That also requires owning up to it when they don’t come true. Before earnings season began, I suggested we would see companies take year-end reserve charges, Continue Reading
The “Position of Strength” Reserve Charge
Summary:Year-End Reserve charges are coming.Companies need to “spin” why they took a charge after claiming their reserves were better than peers.Hence, the “Position of Strength” reserve charge! The Three Rules of Pain Management For those who don’t remember, let’s recall the three rules of when companies admit a reserve problem. Continue Reading
Ian’s Brief #3: Year In Review
Yes, it’s the obligatory end of the year post! Frankly, you could just read the “Best Of” page instead, but if you want a somewhat longer version, here you go… I’ve grouped together the various themes that tended to repeat over the year and many of which you can expect Continue Reading
IANS ALERT: The Amazon Negligence Claims
The Wall Street Journal, among others, has done a great job recently highlighting issues with the third party selling practices at Amazon. I wanted to highlight them today because there is a risk of significant insurance losses if the plaintiff’s bar decides to target Amazon. Background Amazon sells products in Continue Reading
How Low Can EPS Go?
While there seems to be growing consternation about the risk to insurers from escalating loss trend pressure, there has been little worry in the stocks to this point. This has been puzzling to me given a) most stocks are trading at peak valuation and b) earnings could easily be heading Continue Reading