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
Did Catlin Put Out An IANS ALERT?
Summary:1) Stephen Catlin claims insurers are $100-200B underreserved.2) I show the math can’t get you there.3) A $30B US shortfall is plausible.4) Earnings estimates are too high across the board regardless. First, A Pat on the Back! Before we discuss last week’s “news” that Stephen Catlin thinks the insurance industry Continue Reading
IANS ALERT: Emerging D&O Losses
For those truly discerning readers, you might be saying right now, didn’t he already do an ALERT for D&O? And, yes, kudos to you, you have a fine memory! However, that was related to the frequency of nuisance suits like M&A objections. This ALERT is for the coming severity driven Continue Reading
Ian’s Brief #2: The Insurance Haunted House, Underreserved Wildebeests, Mattress Mack, and More
Some may recall the first edition of the Brief where I followed up on some prior topics along with some new thoughts not long enough to make a full post. For Halloween and to keep things light during earnings, I am back with Brief #2. The Insurance Haunted House Nothing Continue Reading