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| News for property casualty insurers |
- GAO study: Inadequate flood-program premiums add to deficit
National Flood Insurance Program premiums are inadequate to cover potential risk and the agency needs to rework its rate-setting methods, according to a report from the Government Accountability Office. NFIP was left with an "unprecedented" $17.4 billion deficit after the 2005 hurricane season, according to the GAO's report to the Senate Committee on Banking, Housing and Urban Affairs. Insurance Journal
(12/9)       
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| | Proactively plan for profitability even in a down economy
Download this free white paper, The Optimized Insurer: Using Analytics to Optimize Business Performance, to learn how to proactively use data to protect profitability. With analytics you'll better understand your business, rapidly detect areas for improvement, forecast more accurately and protect your market share, even in a struggling economy. | |
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| Industry Trends |  | |
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- Oklahoma flood insurance premiums may surge upward
More than 16,000 Oklahoma residents may face higher flood insurance premiums after a Government Accountability Office report recommended an overhaul of the program that sets rates for the coverage. GAO started scrutinizing the issue after Hurricane Katrina left the National Flood Insurance Program $17.4 billion in debt -- partly because of Oklahomans who received $25.6 million more in claims than they contributed to the program between 1978 and 2007. Insurance Journal/The Associated Press
(12/9)
- Sources say AIG's bad bets mean it owes Wall Street firms $10B
American International Group made speculative trades that have since soured, causing the insurer to owe some of the largest firms on Wall Street about $10 billion, sources said. The development, which had not been detailed explicitly, indicates that AIG was likely using its own money to make bets. Reuters
(12/10)
- Oversight committee criticizes Treasury's handling of TARP
A committee established by Congress to oversee the $700 billion economic rescue issued a report that criticizes the U.S. Treasury. "Households that are struggling with debts -- mortgages, student loans, credit cards, car loans, payday loans and other credit devices -- are at the center of the current crisis," according to the report. "For Treasury's disbursements to be effective in the context of the broader economic downward spiral, Treasury must have a strategy that addresses this underlying problem." The report also urges the department to explain its efforts more clearly. Bloomberg
(12/10)
- Texas wind pool: Ike losses may be lower than anticipated
The Texas state wind insurance pool lowered its estimate for claims associated with Hurricane Ike to between $2.1 billion and $2.5 billion, down from $2.7 billion projected earlier this year. The action will allow the Texas Windstorm Insurance Association board to delay or cancel further assessments on the insurance companies that help fund it until summer of 2009 or later. Houston Chronicle
(12/9)
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- N.Y. state workers face ticket-fixing charges
New York state Inspector General Joseph Fisch said three motor vehicle clerks and a middleman are charged with fixing 1,475 traffic tickets for taxi and truck drivers facing license suspensions.
The scheme operated out of the Department of Motor Vehicles offices for two years in downtown Manhattan and Brooklyn. The racket fixed traffic tickets for taxi, truck and other commercial drivers who paid hundreds of dollars to have their tickets "lost," invalidated or changed to lesser infractions. NYTimes.com
(12/9)
| Commercial Lines | | |
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- D&O market in start of steep decline
The directors and officers liability insurance market appears to be at the start of a sharp underwriting downturn, based on 2008 results, analysts at A.M. Best Co. reported this week. The report also noted that some D&O insurers managed their exposure well in 2007 and 2008 by reducing coverage limits and through diversifying away from financial institutions and large public companies. Insurance Journal/A.M. Best
(12/9)
- Mumbai terror attacks could drain insurers' fund pool
With payments to the three luxury hotels damaged in the Nov. 26 attacks in Mumbai predicted to require half of India's $241 million in required regulatory reserves, the country's insurers' pool of funds may be left more than half empty -- a depletion that would expose victims of future attacks to diminished coverage. Insurance executives said the escalation in hostilities will likely prompt more companies to acquire terror insurance coverage, which would drive premiums higher and force insurers to accelerate payments into the pool. Bloomberg11
(12/10)
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