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 Posted: Wed Sep 17, 2008 2:48 am Post subject: Insurance company stability |
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I remember at least one person mentioning how much the insurance industry made last year and how this was a record amount. I pointed out that they did not consider that insurance is not like banking... those profits can _easily_ be lost.
Well, take a look at what a beating that most carriers are taking in the Midwest and the south. Billions of dollars are being spent on losses. I know the company I work for is paying more in those areas then they collected in premiums.
Then look at a company like AIG. Granted, mental defects were at the reigns but this is just another example of how insurance companies _do_ loose money and go belly up. Who would have questioned an insurance company stability or thought an insurance company as large as AIG could be in trouble. Also, look at the repercussions of that news. |
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tcope
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| Posted: Wed Sep 17, 2008 10:13 am Post subject: |
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Hi all, in my opinion the best way to evaluate insurance company stability is by judging it through the following steps-
* Read the respective company policies through their websites
* Call up the customer support & inquire about agent
* Ask the customer support to mail you stuffs that are inexplicable over the phone
Hope once you have a better idea of the different companies & agents it will be an easier task for you to handle such issues. Thanks, Fatman |
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fatman
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| Posted: Wed Sep 17, 2008 10:27 am Post subject: |
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You may always try up the following websites in order to know the insurance company stability -
A. M. Best, Insurance.com
A. M. Best is certainly a good source of comparing the financial strength of numerous insurance companies. With insurance.com too you'd be able to check out the benefits of different auto, home, health & life policies at a glance.
Thanks and regards, Roddick |
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roddick
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| Posted: Wed Sep 17, 2008 10:48 am Post subject: |
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Alot of carriers are in trouble now, I have never in all my years seen soooooooo many carriers laying off employees in IT, claims, everywhere...it's a very very scary time, and this is from some of the largest carriers....it's very un-nerving.
_________________
"Never, never be afraid to do what's right, especially if the well being of a person or animal is at stake. Society's punishments are small compared to the wounds we inflict on our soul when we look the other way." Martin Luther King Jr. |
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Lori
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| Posted: Wed Sep 17, 2008 10:58 am Post subject: |
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| Hi...if you'd check out the tools that come from the different financial raters as well as the industry associations (be it with the IMSA or the DOI of your state) then I'm sure you'd get a proper evaluation of the companies. Fatman |
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fatman
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| Posted: Wed Sep 17, 2008 2:00 pm Post subject: |
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Hi,
The first thing that you'd need to check is whether your company has the legal authority to operate inside your state or within the city that you are residing in. This information could be easily verified with the State DOI and comes handy in determining the insurance company stability . I've noticed that every state has its own unique protocol to deal with insurance carriers & handle insurance complaints accordingly. Keep that in mind too!
Regards, Roddick |
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roddick
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| Posted: Wed Sep 17, 2008 2:06 pm Post subject: |
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| Quote: | | I've noticed that every state has its own unique protocol to deal with insurance carriers & handle insurance complaints accordingly. |
Hi Roddick, please remember that a compliant would only signify that the customer was not satisfied but it would never symbolize any fault on the part of the carrier. Fatman |
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fatman
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| Posted: Wed Sep 17, 2008 2:12 pm Post subject: |
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| But Fatman..I'm sure you'd agree that more of complaints over the years & that too if it is recurring in nature would automatically signify that the company has not been able to tackle their problems in that respective area of operation. Once too many complaints are being lodged against a particular insurer, it is easier for a policy applicant to check with the state DOI & find out the real reason. Roddick |
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roddick
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| Posted: Wed Sep 17, 2008 2:19 pm Post subject: |
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Roddick, we'd always have the right to differ with each other's experiences..right! 
Now, I'd love to speak more on how to assess an insurance carrier's strength in terms of its finances. I believe there are 5 rating firms that offer such ratings-
* Standard and Poor's
* Fitch Ratings
* A. M. Best
* Moody's Investors
* The street.com ratings (I think its the same as the former Weiss Ratings)
I'm sure you guys would add more to this list if there are more names to be attached.
Fatman |
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fatman
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| Posted: Wed Sep 17, 2008 2:26 pm Post subject: |
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Yeah, that's quite right Fatman!
These ratings are quite powerful in one respect, that they would reflect the financial outcomes associated with a carrier's future. A low-rating would automatically signify a shortfall in terms of the carrier's assets or reserves. As you all know, how this could influence the claims payment process & reduce the life span of the carrier in the long run. Hope, you all would count on that too!
Now, I'd be signing off for the time..
Roddick |
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roddick
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| Posted: Wed Sep 17, 2008 2:39 pm Post subject: |
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| Quote: | | As you all know, how this could influence the claims payment process & reduce the life span of the carrier in the long run. |
It becomes absolutely difficult for a financially unstable company to meet claims. The ultimate outcome for such a carrier would be that it might need to sell off its identity or wrap up!
That's the reason why it becomes all the more important for a consumer to keep on checking his carrier's ratings from time to time. Ratings may vary owing to the different circumstances & may vary anytime. There could be a good number of reasons contributing to such differences in ratings-
* Poor decision-making regarding investments
* Unforeseen losses
* Merging of companies
* Possibilities of future absorptions
But, I'm quite sure that people with strong insights would commit less of such mistakes. Fatman |
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fatman
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| Posted: Wed Sep 17, 2008 2:58 pm Post subject: |
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| Quote: | | But Fatman..I'm sure you'd agree that more of complaints over the years & that too if it is recurring in nature would automatically signify that the company has not been able to tackle their problems in that respective area of operation. Once too many complaints are being lodged against a particular insurer, it is easier for a policy applicant to check with the state DOI & find out the real reason. |
Not always true... a company who writes more policies is going to have more complaints. A company that writes non-standard policies is going to have more complaints. It's a good to know how many complaints a company has but the person needs to also understand the variables above.
There is a plaintiff attorney that runs a website disguised as a consumer oriented site and it lists the carriers in order of complaints. You will see the largest companies on top and the smaller ones on the bottom. If a company wrote a million policies and had 1000 complaints they would be doing much better then a company that wrote 100,000 policies but only had 500 complaints. |
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tcope
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| Posted: Thu Sep 18, 2008 5:33 am Post subject: |
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Hi,
One important thing is to see if a company has IMSA membership. If it has IMSA membership, then it must be a promising one. It signifies that the company has passed over the stricter parameters of (i) sales (ii) marketing & (iii) customer service. Even when a company has achieved this membership, they would need to go through these rounds of evaluation over & over again each passing year. IMO opinion that's certainly one good parameter to judge the stature of a company.
Regards, ArindamSenIndies |
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ArindamSenIndies
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| Posted: Thu Sep 18, 2008 6:14 am Post subject: |
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Dear Arin..
That's quite okay to think that in order to build up goodwill & trust you would seek an IMSA membership. But remember you may also evaluate the various life insurance companies using the free online life insurance quotes tools. There are many companies that would not only mail you their own quotes but would also let you compare the different rates offered by various other providers. So, now its your choice to pick it the way you feel its right!
Evan |
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evan
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| Posted: Thu Sep 18, 2008 6:51 am Post subject: |
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Fatman, its not always about judging the company by reading its prospectus. The current financial crisis has deeper roots.
I'm with tcope, its difficult to understand a company's performance from outside. AIG is one perfect example of the current market uncertainties. The recent financial turmoil is capable of turning a big cheap company to a recipient of a Fed bailout in one night.
The downfall of AIG can be attributed to its inability to react fast enough towards the change trends of the market. And the same is happening to many others as well.
Another factor is the natural calamities, which are unsettling the US costal areas repeatedly. A huge amount of money is flowing out towards paying the claims.
Experts are describing the current market recession with the Great depression, which had once taken the US market to the bottom low. We can only hope that the market stabilizes soon. |
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Juanita
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