The Simmonds Business Insurance Index™ February, 2012

The Simmonds Business Insurance Index™
February, 2012

-Renewal Premiums: Slight Increase
-Renewal Coverages: Negotiate
-Buyer's Outlook Long-Term: Prices Increasing / Coverage Restrictions

Everything I see and read tells me I am right about the insurance market - there is a distinct move from buyer's market to seller's market.

The trade magazines and websites are filled with stories of losses and catastrophes that have befallen the industry.  Insurance is a herd.  The herd is looking to increase premiums.  The insurers are convincing each other that now is the time.

Renew your policies by telling your agent to go ahead, and you will find that your premium has gone up. Have competition in the renewal process and you will see your premium stay level or drop.  Insurers want to increase prices.  However, they are not willing to lose good insureds to do so.

You are a "good" insured aren't you?

BancInsure Deal With AmTrust Financial Services

I've been provided with a copy of a press release from BancInsure announcing an agreement with AmTrust Financial Services to acquire the renewal rights to BancInsure's book of business.

BancInsure has struggled of late.  Its AM Best rating has dropped to a B as of a few weeks ago.

While I have not seen BancInsure as a real option for my clients for some time, I want to see robust competition for my bank client's business.  I have reviewed BancInsure proposals on several banks recently.  They just were not competitive - all things considered.

More-players is a good thing.  I hope BancInsure continues on to provide competition to the other bank players.  Banks win when there are many insurers chasing their business.

Gun Insurance

Most home insurance policies include coverage for guns you have in your home.

Most will have a limit of $1,000 or $2,500 for theft of guns.

You can add specific coverage that extends the protection of guns beyond the above for an additional premium - called a "floater" or scheduled coverage.  

You provide your agent with a list of the guns you own and the value for each.  Policies usually cover guns at their market value at the time of the loss.

If you declare a value of $2,000 for a gun and it turns out the gun is worth $3,000, you only get $2,000 if it is stolen.  If you declare $2,000 and it is only worth $1,000, you get $1,000.

Many floaters do not have any deductible.

I do not insure my guns specifically.  I also have a large deductible on my home insurance policy.  I take care of the small stuff and let the insurance company take care of the big stuff.

I also have an alarm, a house-sitter, lock my guns, and lock my doors.

The 2012 Bank Insurance Teleseminar Series

Here is the complete schedule for my bank insurance teleseminars designed for banker who buy insurance for their banks.

February 14, 2012 - Executive Risk and D&O Update

April 10, 2012 - The Bank Insurance Bid Process

June 12, 2012 - Claims Management For Banks

August 14, 2012 - Workers Compensation 101 For Bankers

October 9, 2012 - The Bankers Bond

December 11, 2012 - Ebanking Insurance

Email Scott@ScottSimmonds.com to register.

Sessions start at 1:00 PM Eastern and run for about 45 minutes.

The sessions are reserved for bankers. Insurance agent who want to join must pay an advanced fee of $50. to attend any session.

For more info email me at Scott@ScottSimmonds.com.

Insuring Inflatable Pigs

Engaged in the review of insurance for a bank...

Among other issues, I uncovered the fact that the bank has two inflatable pigs valued at $6,000 each.  Currently insured for $5,000 each.

Inflatable Pig Coverage Gap: $1,000 Per Pig or 17% Under-Insured.

Another day of solid work for my clients!

(Wink!)

Work Comp Experience Mod and Changing Your Policy Dates

The experience modification is a ratio of expected losses to actual losses by a particular employer.

A mod of 1.00 means you are average.

.90 means you are better than average - plus you save roughly 10% on your workers' compensation insurance.

A mod of 1.10 means you are worse than average - plus you pay roughly 10% more on your workers' compensation premium.

Many client like to move their policy expiration dates so that they come up for renewal on the same dates.

A, generally, good idea.

Except for workers' compensation..

When you change the date of your workers' compensation policy you get more time added to your experience mod calculation.  I can't explain the math, but it almost always results in the experience mod going up (a bad thing for employers).

In short, don't change the date of your workers' compensation policy unless you want to see a upward blip on your premium.

Simmonds Business Insurance Index - January 2012

The Simmonds Business Insurance Index™
January, 2012

-Renewal Premiums: Slight Increase
-Renewal Coverages: Negotiate
-Buyer's Outlook Long-Term: Prices Increasing / Coverage Restrictions

Holding fast with my index - no change this month.

I see the end of the buyer's market.  My clients who renewed in December and on January first have faired pretty well.  In half the renewals the premiums dropped for equivalent coverage - we were also able to negotiate terms after we had received the insurers final-final offer.

As I have said before, negotiate, negotiate,  negotiate.  You have to work for it.

Sometimes the negotiation is nothing more that waiting and saying something like, "Let me get back to you."

Bought a new car last week (end of the year).  Emailed the dealer.  Got a quote.  Told the dealer I'd think about it.  Half hour later I got a call back with a better offer.  The next day, a better offer.  Saturday the dealer called with an even better offer.  Through the process I let the dealer know I had other options.  Now I'm driving a new car.

Insurance negotiations is really no different.  Know what you want.  Have a strategy.  Be willing to give up some stuff.  Know what you will not compromise on.  Keep asking.  Don't show too many cards too quickly.  Always leave them wondering.  Make sure you have options that the agent and insurer are not sure of.