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Vol 1, Issue 1 |
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| The Bull Stops Here
Saving You Time, Money, and Frustration on Your Insurance
October 2008 ed. # 40 |
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Thank you for subscribing to my newsletter.
It's purpose is to offer you strategies and suggestions that will save you time, money, and frustration on your insurance.
You are encouraged to forward this to anyone you feel will find this information valuable. Please use the "Forward e-mail" link below.
Be safe.
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The AIG Fiasco and You |
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The recent stock market disaster will ultimately affect your insurance premiums by driving up premiums and tightening underwriting guidelines.
If you are like many insurance buyers in the country, you've probably wondered what the AIG bailout means to the insurance industry and your premiums. I've tried to answer that question recently to many of my clients. None of us has a crystal ball, but here are some thoughts based on my 21 years in the industry.
First, the insurance property and casualty industry has been in a soft market since 2003. That means underwriting is aggressive both in premiums and appetite. For you it's meant lower premiums and more companies willing to bid on your insurance. When companies can make a profit from their investments, they can overcome underwriting losses. This is a cyclical business and five years is a long time for a soft market.
Since the market began struggling when the housing bubble burst, I've been waiting to see if the market would begin to adjust. It didn't. Now, with the AIG fallout and the financial industry debacle, the stock market has plummeted and I'm guessing you will begin to see the ripple effect within the next 12 months.
The last hard market was precipitated in a large measure by the September 11th terrorist attacks which badly damaged the stock market. The recent losses have been worse than even that time so there's no reason to think it won't happen again. When an insurance company giant like AIG is on the brink of elimination, you can bet that every other company in the world is looking closely at how they invest and determine rates.
If you are insured by AIG, you can be reasonably satisfied that your policies will remain in force. The government bailout took care of that. However, that doesn't mean you will be able to renew your policy at the same rate, or even be offered a renewal. It's too early to tell what their course of action will be.
In the end, you can expect a return to the hard market over the next 12 months. Certainly, that's my opinion, and it's an educated guess. Here are a few strategies you should employ as you look to renew your policies -
- Be aware of the financial rating of your insurance carrier. A.M Best and Weiss are two industry leaders in assessing the stability of insurers. This shouldn't be overlooked as an important factor anymore.
- Get several bids. Insurers may make changes on what classes of business they will consider. Examine your options.
- Make yourself attractive to insurers. As they begin to tighten underwriting guidelines, that means the best premiums will go to the best risks. You need to be considered a "best risk".
- Improve your risk management policies and procedures. This is part of the previous bullet point. Your claims history becomes a huge factor in acceptability and premium.
One final note - Don't be afraid to ask the hard questions and demand good answers. Your business and its future are on the line. Become a risk that insurers want to insure and be picky about who you choose to trust.
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What's Your Recovery Plan if the BIG ONE hits? |
 "What do you do with 50 employees tomorrow if a disaster strikes today?"
Ask yourself that question and input the right number of employees for your business. The ramifications of being unable to continue operations is a very real danger to survival in the event of a claim. I am proud to be an Agility Recovery Solutions team member. My goal is to make sure you and are able to not only survive, but prosper in case of a disaster. Find out how you can get a 60-day free trial with Agility. No obligation. No risk. Huge reward. |
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September Articles |
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Learn how to reduce your exposures to loss, decrease your costs, and save valuable time. Read these new articles available on my blog.
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Case Study - Identity Theft |
The risk of Identity Theft continues to grow for businesses and you could be next.
Last month, one of my clients was the victim of an identity theft. Duplicate business checks were made and before they knew what hit them, had $6,000 stolen from their bank account.
What are the costs associated with this situation? Loss of time is the biggest. Changing accounts, dealing with the police, and the stress of the entire event can eat into your time spent on the job. What is your time worth? There is also the potential cost of lost money if the situation isn't quickly acted upon.
Your regular insurance policy is not set up to protect you from insurance theft. There are more companies that are including additional coverages or endorsements to this growing concern. Ask your agent what they can do to help you with this exposure.
In the "old" days, you were concerned about being robbed. Today, it's a whole new ballgame. Have you done your due diligence to protect your business name and reputation?
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Rave Reviews for Toro |
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Dan is the type of person you can trust in any capacity to make sure things are done right. That's why we hired him to take care of our corporate insurance. He has gone beyond the call of duty..." - David Rill - Rill's Life Tribute Center (Port Orchard, WA)
"His integrity and ability are of the highest quality and we have achieved measurable results in the form of dramatically lowered insurance premiums and accidents."
- Kyle Kincaid, Parker Lumber Co. (Bremerton, WA)
How can Toro help your business? | |
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Thank you for your subscription to the Bull Stops Here!
Warm regards,
Dan Weedin
Toro Consulting, Inc.
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