State Farm General Insurance Company’s financial strength rating (FSR) and issuer credit rating (ICR) have been revised by A.M. Best Co., upgrading them from their previous “A-“ (Excellent) to a current “A” (Excellent), in both cases. State Farm Group and State Farm Life Group and their members have also received an FSR and ICR of “A++” (Superior) by Best. State Farm Fire and Casualty Company in Dallas, State Farm Indemnity Group, and State Farm International Life Insurance Company, Ltd, also had had their FSR and ICR affirmed by Best. All…
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This year’s hurricane predictions are a big concern for insurance industry
Risk Management Solutions, a world leader in catastrophic risk modeling, has released a new study regarding hurricanes that has sent ripples of concern throughout the insurance industry. Hurricane season is here and it is expected that several major hurricanes will form in the Atlantic Ocean on their way to Florida. The study suggests that if even one of these hurricanes makes landfall and forces its way to the interior of the state, the damage would be unprecedented. This has caused many insurers in Florida to speculate how the report could…
Read MoreRisk Management Services hurricane catastrophe model approved by Florida Commission
The residential property insurance marketplace in the state of Florida is expected to face an even greater amount of volatility after the modeling commission for the state approved the use of a new catastrophe model by Risk Management Services (RMS). The RMS U.S. Model Version 11.0 was approved by the Florida Commission on Hurricane Loss Projection Methodology, which allows insurance companies to use it for the calculation of the potential exposure to hurricane loss. That said, this model has not been without controversy, especially in terms of its changes to…
Read MoreHigher reinsurance rates predicted
Despite record losses in the first quarter of 2011 and a hurricane season predicted to be exceedingly active, the reinsurance industry is in good spirits. While several insurance companies are dreading hurricanes reaching land, reinsurers expect that one storm causing extensive losses could mark the turning point of the insurance pricing cycle toward their favor. This would mean that higher reinsurance rates, a fact that would go a long way in helping the industry recover from a disastrous first quarter. Henry Keeling, CEO of Guy Carpenter’s International operations, recently attended…
Read MoreGovernment looking for buyers
Several major businesses floundered in the wake of the global economic recession. Unable to recover in the early days of the economic downturn, many of these companies were allowed to fail. In the U.S., some of these companies received federal aid in the form of massive cash injections. The American International Group, an American insurance corporation, was one such company. AIG, however, mishandled the funds in one way or another, leading the government to seize the company. Now, The U.S. Treasury Department is selling shares of the company in the…
Read More2011 turning out to be one of the industry’s hardest hits
The frequency of calamitous events so far this year has insurance companies all over the nation and bracing themselves for massive losses. With destructive weather wreaking havoc throughout the Southeast and Central U.S., many insurers have already faced $10 billion in losses due to natural disasters. According to EQECAT Inc., a disaster and risk modeling firm, the national average in weather-related losses is $4 billion. Insurers can expect to see higher than average losses as an unusually active hurricane season begins soon. Disasters overseas are likely to have an effect…
Read MoreA.M. Best reports on P&C insurance industry
A recent market analysis by A.M. Best shows there is increasing pressure in the property and casualty insurance and reinsurance sector to support rate increases. Collective insured losses from disasters in Japan, New Zealand, Australia and other events have pushed companies to safeguard their capital and push for rate increases. According to Best, some reinsurers may not see profits from underwriting for the better part of a year; caused by significant increases in first quarter combined ratios compared to December last year. Consequently, Best maintained a “stable” rating for the…
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