Homeowners Insurance Loss Ratio Chart

In reference to the following published by Florida Today newspaper, I received the following question. I’m no longer licensed as an insurance agent, so I can’t give personal advice on insurance, but I’ll go ahead and comment on the general issues if it might be helpful for those looking for some direction on these issues.

Here’s the original email I received:

The chart that appeared in FLORIDA TODAY last Sunday, 8/5/07, deserves some analysis. I am no expert. I wish one would step forward. Until one does, here are my observations:

1) This chart cuts to the chase. It simply shows the ratio of claims paid to premiums collected. It’s very basic and uncluttered with things like re-insurance (whatever that is) or overhead.

Allstate Floridian gives property policies to Royal Palm

Allstate Floridian, a subsidiary of Allstate Corporation, was originally formed in 1996, in the political aftermath of Hurricane Andrew that struck Florida in 1992. It’s purpose was to be a stand-alone company that would help to isolate its parent corporation from severe catastrophe losses in Florida. After years of chaos in the Florida property market, the creation of a state-mandated and state-funded property market, and the insolvency of nearly a dozen property insurers (including others that left the state before insolvency), the Florida marketplace for property insurance was significantly desolate.

Allstate, looking to keep its profitable auto insurance business alive in Florida, resolved to solve this problem with the creation of an entirely separately-capitalized company. It would have its own ratings, its own funding, and most importantly, Allstate Floridian’s losses would stay with Allstate Floridian - ideally, not affecting the millions of other policyholders around the country.

7 Tips to Manage your Agency

I wrote this a while back for insurance agency owners, but it may equally apply to your business.

1. Track (religiously) anything that you want changed. Information is power - and not a burden to track when it helps you achieve your goals. If you don’t know, well then, you don’t know. And if it takes you 30 minutes to find out, you won’t access that information very frequently. The old saying is true: What gets tracked, gets done.

2. Don’t rely on your carriers to tell you how you are doing. You are always doing “great” or “terrible” in their eyes… but how are YOU really doing? Can you show it to me in writing in ten minutes with assurance? Can you do it again next week with correct and updated information?