Profitability in the insurance industry is determined by combining both underwriting results and investment results. Despite incurring substantial underwriting losses over the 10-year period 1976 through 1985, the property/casualty insurance industry has more than offset those aggregate losses with investment gains. The underwriting losses resulted, in part, from the industry’s cash flow underwriting pricing strategy in which companies sacrificed underwriting gains in an attempt to attract more business and thereby enhance investment gains. We estimate that the industry had about $81 billion in after-tax income over this period. Because of the cyclical character of the industry’s underwriting experience, we believe that data covering longer periods, rather than concentrating on the last few years, provide better perspective on the industry’s profitability. (more…)

Pay particular attention to issues involving liability. This coverage protects your assets against lawsuits. Review the liability limits of your insurance policies. In the past most of the personal liability risks you faced probably came in some degree from your business or work. For most people, homeowners insurance coverage offers their main protection from non-work related personal liability. As you spend more time away from work, (more…)

For most of us, our house is our largest asset. We expect to pass this inheritance along to our children. In some cases, you can keep your house and still have long-term care insurance plan; but more often, you may need to use the real estate equity you’ve accumulated through your lifetime to pay for your very old age. (more…)

The Unfair Claim Settlement Practices Act provides that no insurer may engage in unfair claim settlement practices. Examples of unfair claim settlement practices are:

• The intentional misrepresentation to a claimant any pertinent facts or policy provisions which relate to the coverage at issue (more…)

PRUPAC (Prudential Project Advisory Committee) estimated that the senior discounts insurance would apply to about 25 percent of its customers.

That low loss rate means a lot to insurance companies. One example: Colonial Penn Property/Casualty Insurance Group, which also specializes in selling insurance to seniors, had enjoyed two decades of strong performance when it decided in the early 1980s to expand beyond its traditional market. (more…)

Replacement Value is the cost of replacing, reproducing or restoring the property, brand now, without deduction of depreciation. In other words, a school district insuring on the basis of Replacement Value is paid for the full value of the damaged property, brand now, at the time of loss. However, to collect the full replacement value, the Insured must actually repair or replace the property. Otherwise, the settlement will on an Actual Cash Value basis. (more…)

Though individual insurance companies can set general auto insurance rates, with the highest on young drivers who have statistically been proven greater accident injury risks, most states prohibit them from automatically increasing policy costs for drivers simply because they’ve passed their fiftieth or sixty-fifth birthdays. (more…)