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January 2007

Insurance Premiums Growing More Slowly

Falling insurance prices may slow growth in U.S. property and casualty premiums to 1.5 percent next year, a sign that competition for customers could threaten future profits, an industry group said. ”The current premium growth pattern is eerily reminiscent of the soft market of the late 1990s,'' Bob Hartwig, chief economist for the Insurance Information Institute, wrote in a report released Thursday. ``Those years presaged some of the worst years in insurance industry history.''

Competition in 1997 and 1998 led to industrywide annual underwriting losses through 2001 because rates on property and casualty coverage proved to be too low to profitably cover claims. Annual sales growth that was as high as 14.6 percent in 2002 is forecast to slow to 2.8 percent this year before decelerating to 1.5 percent in 2007, according to the institute's yearly survey of analysts and consultants.

Source: InsuranceNewsNet

Workers' Comp Loss Costs, Assigned Risk Rates Going Down in N.H.

The New Hampshire Insurance Department has approved a workers' compensation voluntary loss cost decrease of 0.9 percent on average along with a reduction in assigned risk rates of 0.6 percent. The new figures go into effect Jan. 1, 2007.

The decision mirrors the request made by the industry's National Council on Compensation Insurance in a September filing. All companies writing workers' compensation coverage in the state are required to adopt NCCI's advisory loss costs.

Source: Insurance Journal

N.Y. Officials Charge 8 with Commercial Fleet Insurance Fraud

Eight people have been charged with defrauding insurance companies by registering commercial motor vehicle fleets in upstate New York to avoid higher premiums in New York City, an Albany County District Attorney said.

By falsely registering their vehicles in counties where insurance rates were lower, the defendants reduced their insurance premiums by a total of $1,426,863. The bulk of those vehicles were registered at an address 14 miles southwest of Albany.

The eight individuals face multiple counts of insurance fraud in the second and third degrees and Offering a False Instrument in the first Degree, all felonies.

The district attorney's office worked with numerous agencies, including the state Insurance Department and New York City police, in its investigation.

Source: Insurance Journal

Greater Opportunities and Challenges Abound in ’07 for U.S. Insurance Industry

According to some industry analysts, the battleground (or rather, the goldmine) for next year’s insurance industry will most likely be the demographic of retiring Americans. 2007 looks to be a year full of achievements, as well as challenges.

It is anticipated that the insurance industry will need to develop innovative services to compete successfully and strengthen customer loyalty with the boomer and senior populations. Some experts say that the key factor for success lies in how producers and advisors either maximize or mishandle opportunities to generate sales from the aging population. Retirees are hungry for a wide range of retirement services, from fund longevity to financial security for loved ones in the event of death.

Just a year after the most devastating disaster ever - Hurricane Katrina - hit the U.S., the insurance market is becoming bullish once more. From a list of 26 industries on Forbes’ latest Platinum 400 list, the insurance industry has shown the best five-year earnings per share growth, with a median annualized gain of 30%.

One of the industry’s top earnings estimators has forecasted that title insurers present a good opportunity for the year 2007, despite a possible volume decline.

Source: InsuranceNewsNet

N.Y. Drywall Contractor Charged with Workers' Compensation Fraud

A New York business owner faces charges of insurance fraud following his arrest by the Manhattan District Attorney’s office for allegedly defrauding the New York State Insurance Fund of more than $200,000 in premium on his workers' compensation policy.

The Manhattan DA's office said they arrested the owner on December 12, charging him with insurance fraud, and his company, with violating Section 114 of the Worker's Compensation Law , both felonies.

Investigators said the business owner allegedly underreported the company's payroll to avoid paying the correct premium on his workers' compensation policy with NYSIF. According to authorities, the amount of fraud the owner is alleged to have committed by underreporting payroll is in excess of $207,000.

Source: Insurance Journal

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