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
IANS Alert: Did Talcum Powder Cause Your Cancer?
First, if you didn’t see the post on corporate governance earlier in the week, take a look! Second, if you don’t remember, what an IANS ALERT is, I covered it here and here. The short version is when there are significant claims events out there in the system that insurance Continue Reading
IANS ALERT: D&O Reserves
I’m going to start a new semi-recurring feature of short posts called IANS ALERTs. Recall, from the recent post on pricing, I introduced the concept of IANS = Incurred And Never Spoken. These are shadow reserves that companies know they need but forget to tell the actuaries! When I come Continue Reading
The Path of Pricing: Possibility vs. Probability
There has been a lot of optimism recently regarding improvements in insurance pricing. Unfortunately, it is hard to know how much credence to put into this optimism as insurance company executives suffer from “overexuberance complexitis” continuously predicting pricing turns that usually die before they get started. Thus, today’s topic is Continue Reading
10K Reserve Disclosures: What are they good for?
Note: Don’t miss today’s other post on AM Best’s new innovation standard! Punchline:10K reserve disclosures need to require earned premium data. I’m going to channel my inner Chris Berman and quote a 50 year old song and act like everyone should get the reference. So here goes: 10K reserves…what are Continue Reading