Insurance executives ask their heads of claims the same thing: "How many Securities Class Action Cases (SCAS) were filed?" There's no industry standard definition and Advisen, our friend Kevin LaCroix at the D&O Diary (blog here), and other service providers like NERA or Cornerstone have varying counts.
NERA and Cornerstone make their money by serving as expert witnesses during trial and pre-trial stages. NERA and Cornerstone collect data as a byproduct of this business.
Advisen makes its money collecting data and licencing access to this data on a one-time or continuous basis. Data and predictive models are our core business and we are dedicated to the commercial insurance industry so our output is tailored to their specific needs.
So the answer to the executive's question is "Depends on what you define as a SCAS" but, more importantly, SCAS is only one part of the exposure to liability insurers. In fact, in Q1 2009, SCAS dropped to less than 40% of all securities filings. Advisen tracks shareholder and other derivative suits and cases involving breach of fiduciary duty and securities fraud.
Advisen tracks filings in US federal and state courts and collective actions and other cases filed in overseas courts against US and non-US companies.
In summary, there is no standard definition of "securities class action suit." But for management liability professionals, the more important question is"How many and what types of lawsuits are likely to result in claims under D&O, E&O or fiduciary liability policies?" Advisen tracks and reports on all manner of suits, filed in state, federal and foreign courts, that are likely to result in losses to companies and their management liability insurers. The Advisen database is the most complete, accurate and timely of its kind.
Today Advisen released the findings of its quarterly securities litigation review and the report is available free of charge here. The headline is that filing activity was up significantly from 2008 rates, but the pace can't be sustained and will likely level off over the year.
The executive's follow up questions are "how many of these companies do we write policies for" and "what do we need to reserve". Reserving capital erodes profit so frequency is not popular, but frequency of filings is only part of the picture.
The elephant in the D&O room is whether these cases will yield insured loss. Advisen has already written (see here) about how defense costs are going to eat significantly into the policy limits but that for many reasons, this increased frequency is unlikely to result in an increase in claims paid.
D&O and E&O professionals would benefit from reading the report (here) and seeing if their clients are on the list (here).
Showing posts with label Insurance. Show all posts
Showing posts with label Insurance. Show all posts
Monday, 4 May 2009
Friday, 17 April 2009
Why Say Yourself What a Client Can Say Better?
One of our retail broker subscribers posted a note internally to colleagues about why they should use Advisen - because it helps them make money. I have excerpted in the below for weekend reading - on the flight to RIMS?
Ready to Close that Deal?
Advisen may be the solution!
Whatever happened to the good old days of loyalty coupled with an insurance broker who provides better value than their competitors? In these tough times as all sectors of the economy struggle to tread water, many of us are probably wondering why accounts that we have had ten or twenty years are heading for the door. There is one answer: The bottom line. Do not give up quite yet! There is a software tool that can:
1) Increase the ratio of your sales
2) Provide your client or prospect with valuable information about their industry and insurance policy
3) Clearly put the term “value” back into the minds of the consumers
Advisen is fueling global business insurance with the industry’s first ever online knowledge marketplace.
Advisen’s wealth of information resources, combined with a sophisticated search engine, data mining, and analytical tools provide strategic information services to the insurance industry. By aggregating information relevant to the business insurance industry, Advisen has created a workspace where insurance underwriters, brokers and business managers assess, quantify and evaluate risk within and across domains, benchmark performance against best practices, and track regulatory developments.
Recently, a colleague asked me if I could check what the self-retention average for a company who specializes in real estate management with revenue over $100 million dollars would be. After filling out the brief search engine questionnaire on the software, I was able to create a graph which illuminated the average retention of similar companies across the country. Based on this information, we were able to determine that the retention was right where it needed to be.
We didn’t stop there. I used Advisen to do a policy form comparison between the incumbent broker’s policy form and the carrier’s form that we were planning to use. We were able to show the prospect where the norm in terms of retention fell for their industry, the difference in wording between policies, and also how that could affect the payout of a claim in the event of a loss. To say the least, the prospect was very impressed.
Ready to Close that Deal?
Advisen may be the solution!
Whatever happened to the good old days of loyalty coupled with an insurance broker who provides better value than their competitors? In these tough times as all sectors of the economy struggle to tread water, many of us are probably wondering why accounts that we have had ten or twenty years are heading for the door. There is one answer: The bottom line. Do not give up quite yet! There is a software tool that can:
1) Increase the ratio of your sales
2) Provide your client or prospect with valuable information about their industry and insurance policy
3) Clearly put the term “value” back into the minds of the consumers
Advisen is fueling global business insurance with the industry’s first ever online knowledge marketplace.
Advisen’s wealth of information resources, combined with a sophisticated search engine, data mining, and analytical tools provide strategic information services to the insurance industry. By aggregating information relevant to the business insurance industry, Advisen has created a workspace where insurance underwriters, brokers and business managers assess, quantify and evaluate risk within and across domains, benchmark performance against best practices, and track regulatory developments.
Recently, a colleague asked me if I could check what the self-retention average for a company who specializes in real estate management with revenue over $100 million dollars would be. After filling out the brief search engine questionnaire on the software, I was able to create a graph which illuminated the average retention of similar companies across the country. Based on this information, we were able to determine that the retention was right where it needed to be.
We didn’t stop there. I used Advisen to do a policy form comparison between the incumbent broker’s policy form and the carrier’s form that we were planning to use. We were able to show the prospect where the norm in terms of retention fell for their industry, the difference in wording between policies, and also how that could affect the payout of a claim in the event of a loss. To say the least, the prospect was very impressed.
Tuesday, 14 April 2009
Workers Comp Costs: A Price of Doing Business?
Insuring your workforce is a tricky task. Our staff at Advisen has grown older this year as we've changed some faces and, sadly, we all seem to get older every year despite trying hard not to behave accordingly.
So our benefits renewal was not pretty - the older the staff the higher the premiums. Definitely not something we considered when making hiring decisions - but material to the expense line.
Looking at Workers Compensation insurance, there are a few main drivers for success. One of them is productivity - can you get your staff utilization up and the other is cost - can you keep your fees down and lower your workers comp coverage.
Recently we met Rebecca Shafer who's had a distinguished career at Marsh (pioneering Injury Management Consulting) and at Aon (CEO of the workers' compensation consulting unit of Aon Risk Services, Aon Management Institute (AMI) in Glastonbury, CT, and was responsible for the development of "Comp Camp.").
An attorney, Rebecca retired from Aon and must not have read enough about how hard it is to start up a company from scratch - she founded Amaxx to build the Workers Comp Kit to manage workers comp and her site at ReduceYourWorkersComp.com - also note her blog in my Blogroll to the right.
From her site "Many of her clients have experienced cost reductions of 20 to 50 percent. Her clients have included Rite Aid, Warner Lambert, Continental Airlines, U S Airways, Universal Orlando, New York Times, TV Guide, CVS, Knight-Ridder, New Haven Terminal, Centerplate, Simpkins Industries, American Tourister, and numerous other national, mid-market accounts and small accounts."
From our joint press release today comes the following pithy comment full of good keywords to get unsuspecting Google searchers to discover us at Advisen:
“Companies typically spend 30% of their risk management dollar on workers’ compensation, according to the RIMS 2008 Benchmarking Survey, but most managers are unsure how they can reduce these costs,” said Mason Power, GM of Advisen. “While companies buying workers comp and their brokers are a key part of the 100,000 industry professionals who subscribe to Advisen, the Workers’ Comp Kit® also offers a predictive analysis enabling insurance companies, state funds, captives and reinsurers to establish a threshold risk profile for underwriting purposes. This partnership further demonstrates Advisen’s commitment to providing invaluable insight to the commercial insurance marketplace.”
Beyond the salesy stuff (the WC Kit is for sale through our store), it's clear that our subscribers find Rebecca's work relevant, particularly how it helps them benchmark workers comp producitvity and cost. We ran a series of seminars with hundreds of attendees on each session and the feedback has been terrific. ReduceYourWorkersComp is a welcome addition to our Partners (see here for further info about the partnership). Rebecca and Advisen will be at the upcoming RIMS conference in Orlando starting this Sunday.
So our benefits renewal was not pretty - the older the staff the higher the premiums. Definitely not something we considered when making hiring decisions - but material to the expense line.
Looking at Workers Compensation insurance, there are a few main drivers for success. One of them is productivity - can you get your staff utilization up and the other is cost - can you keep your fees down and lower your workers comp coverage.
Recently we met Rebecca Shafer who's had a distinguished career at Marsh (pioneering Injury Management Consulting) and at Aon (CEO of the workers' compensation consulting unit of Aon Risk Services, Aon Management Institute (AMI) in Glastonbury, CT, and was responsible for the development of "Comp Camp.").
An attorney, Rebecca retired from Aon and must not have read enough about how hard it is to start up a company from scratch - she founded Amaxx to build the Workers Comp Kit to manage workers comp and her site at ReduceYourWorkersComp.com - also note her blog in my Blogroll to the right.
From her site "Many of her clients have experienced cost reductions of 20 to 50 percent. Her clients have included Rite Aid, Warner Lambert, Continental Airlines, U S Airways, Universal Orlando, New York Times, TV Guide, CVS, Knight-Ridder, New Haven Terminal, Centerplate, Simpkins Industries, American Tourister, and numerous other national, mid-market accounts and small accounts."
From our joint press release today comes the following pithy comment full of good keywords to get unsuspecting Google searchers to discover us at Advisen:
“Companies typically spend 30% of their risk management dollar on workers’ compensation, according to the RIMS 2008 Benchmarking Survey, but most managers are unsure how they can reduce these costs,” said Mason Power, GM of Advisen. “While companies buying workers comp and their brokers are a key part of the 100,000 industry professionals who subscribe to Advisen, the Workers’ Comp Kit® also offers a predictive analysis enabling insurance companies, state funds, captives and reinsurers to establish a threshold risk profile for underwriting purposes. This partnership further demonstrates Advisen’s commitment to providing invaluable insight to the commercial insurance marketplace.”
Beyond the salesy stuff (the WC Kit is for sale through our store), it's clear that our subscribers find Rebecca's work relevant, particularly how it helps them benchmark workers comp producitvity and cost. We ran a series of seminars with hundreds of attendees on each session and the feedback has been terrific. ReduceYourWorkersComp is a welcome addition to our Partners (see here for further info about the partnership). Rebecca and Advisen will be at the upcoming RIMS conference in Orlando starting this Sunday.
Thursday, 26 February 2009
Notes from the PLUS D&O Conference
Always good to see clients, friends and even some folks who admitted to being readers of this blog. We're in the process of redesigning www.advisen.com and will be featuring blog posts from Dave Bradford and me among others and pull in from other favorite commentators.
Dave presented at PLUS about the correlation of bankruptcies and D&O loss and the audience really seemed connected to this important topic. The findings Dave presented were a small part of the research Advisen can conduct and we are looking for equity partners in the project.
This means firms with interest in getting a securities litigation risk score for all U.S. public companies based on their risk of bankruptcy should contact me. By joining others in the initial funding partners will be the only recipients of these risk scores. mpower@advisen.com if interested.
VJ Dowling who I enjoyed meeting at the Allied World party (they have a company rock band which did some good covers), provided a bit of color to Dave about the performance of Odyssey Re (see earlier post about trailing twelve month market cap performance for commercial insurance companies).
Apparently Odyssey's CEO has said he'd love to claim underwriting genius but it was the brilliance of their chief investment officer who foresaw the credit crisis and bet accordingly. If you look at the chart he must have been selling what Joe Cassano at AIG was buying.
Dave presented at PLUS about the correlation of bankruptcies and D&O loss and the audience really seemed connected to this important topic. The findings Dave presented were a small part of the research Advisen can conduct and we are looking for equity partners in the project.
This means firms with interest in getting a securities litigation risk score for all U.S. public companies based on their risk of bankruptcy should contact me. By joining others in the initial funding partners will be the only recipients of these risk scores. mpower@advisen.com if interested.
VJ Dowling who I enjoyed meeting at the Allied World party (they have a company rock band which did some good covers), provided a bit of color to Dave about the performance of Odyssey Re (see earlier post about trailing twelve month market cap performance for commercial insurance companies).
Apparently Odyssey's CEO has said he'd love to claim underwriting genius but it was the brilliance of their chief investment officer who foresaw the credit crisis and bet accordingly. If you look at the chart he must have been selling what Joe Cassano at AIG was buying.
Wednesday, 5 November 2008
$9.6 billion in Insured D&O and E&O Loss from the Credit Crisis
The PLUS International conference expects over 1,600 attendees in San Francisco this week including 4 from Advisen.
Timed for the start of this conference Advisen has launched a special edition newsletter (see here) to publish news stories about professional liability and most importantly, to publish unique and groundbreaking research by Advisen.
Today we started with a revised forecast (upwards) as a result of the meltdown of the subprime mortgage market and the ensuing credit crisis. for D&O insured loss. In February, Advisen forecast $3.6 billion of insured losses but as the credit crisis has mushroomed into a global financial calamity, we have revised the forecast to $5.9 billion.
The free report on D&O losses is available here.
Advisen is the first to forecast the insured loss for E&O from the credit crisis saying that E&O losses will be centered around mortgage brokers who will see thousands of smaller lawsuits and around mortgage lenders who will see fewer, but higher value suits, the total being $3.7b.
The free report on E&O losses is available here.
AIG has had top market share in both financial institution D&O (19%) and E&O (34%) and Advisen expects new insurers to enter the market. To prepare buyers, brokers & insurers for operating in the new world order in the financial services sector, Advisen has published a comprehensive 38-page study of the changed industry landscape and how it impacts on risk and insurance.
The full report on the financial services industry is available here.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uTASmDgmB2H5HE6-Y7kJ8Af639UiSNNzcKjv9ueOYHgOMQNg_BbsQ1XVgBlsXjtIGTE58UVb55CktbdQvRlc3B3FQNgGlgPEtJGf-IUX6Vwht3utVPjRHL5jX_Cp_u-TGwirZp7FUjGh3vrtHE4O4=s0-d)
Timed for the start of this conference Advisen has launched a special edition newsletter (see here) to publish news stories about professional liability and most importantly, to publish unique and groundbreaking research by Advisen.
Today we started with a revised forecast (upwards) as a result of the meltdown of the subprime mortgage market and the ensuing credit crisis. for D&O insured loss. In February, Advisen forecast $3.6 billion of insured losses but as the credit crisis has mushroomed into a global financial calamity, we have revised the forecast to $5.9 billion.
The free report on D&O losses is available here.
Advisen is the first to forecast the insured loss for E&O from the credit crisis saying that E&O losses will be centered around mortgage brokers who will see thousands of smaller lawsuits and around mortgage lenders who will see fewer, but higher value suits, the total being $3.7b.
The free report on E&O losses is available here.
AIG has had top market share in both financial institution D&O (19%) and E&O (34%) and Advisen expects new insurers to enter the market. To prepare buyers, brokers & insurers for operating in the new world order in the financial services sector, Advisen has published a comprehensive 38-page study of the changed industry landscape and how it impacts on risk and insurance.
The full report on the financial services industry is available here.
Tuesday, 7 October 2008
Commercial Insurance Brokers Speak out about AIG
Below is a summary of our report on what 611 commercial insurance brokers had to say about the AIG situation. For the full report click here.
I thought it noteworthy that 47% of brokers said they believe the AIG commercial insurance units will be broken up and they had concerns such as one broker saying "AIG's book of multinationals needs all the the p&c Companies to stay in place worldwide."
AIG uses its marketshare as leverage and this isn't always appreciated, as one broker said, "Couldn't have happened to a more appropriate carrier! As you sow, so shall you reap!"
Others disagreed: "The knee jerk reaction by some brokers to replace AIG is insane. This is not the revenge of Kemper or Reliance, and it's unfortunate that there are so many ignorant brokers out there."
With AIG's stock down over 90% and shareholders diluted 79.9%, AIG employees with stock compensation and stock in their retirement accounts are hurting and other carriers are poaching talent as quickly as they can. One broker summed up their concern as follow "It will be difficult to continue doing business with AIG as in all probabliity the personnel at AIG will change with good people finding new positions with more promise then a wounded AIG can offer.
Some brokers thought they would be comedians: "If AIG fights to to pay claims for/to its insureds, what logic says that AIG will repay its loans to the federal government?"
Some showed appreciation for Advisen which I appreciated, "Thanks for conducting this survey -- I've been curious about what other insurance executives think."
Below is the press release. Contact me if you have questions or trouble getting the full report.
SECOND ADVISEN SURVEY SHOWS THAT BROKERS ARE MORE CONFIDENT THAN RISK MANAGERS IN FINANCIAL SECURITY OF AIG COMMERCIAL INSURANCE UNITS
HOWEVER 47% OF BROKERS BELIEVE AIG WILL HAVE TO SELL SOME UNITS; CONCERN EXPRESSED
New York. October 7, 2008 – Advisen Ltd., the leading provider of content, analytics, and technology to the global commercial insurance industry, today released a special report based on a survey of brokers following the American International Group (AIG) liquidity crisis. On the heels of a similar survey of risk managers, Advisen sought to measure brokers’ confidence in AIG after the $85 billion loan by the federal government. “Wary” was how the vast majority of brokers characterized the attitude of their clients towards the unfolding situation at AIG, but with only one respondent claiming that clients are “panicked”, most brokers of commercial insurance are confident in AIG after the federal loan and few are recommending clients switch from AIG.
The Advisen survey of risk managers found that about two thirds intend to get quotes from AIG’s competitors at policy renewal, but according to the broker survey, few buyers have yet given their broker firm instructions to replace AIG. Brokers also opined in survey results about the potential impact the insurance pricing cycle and the potential impact on their fee and brokerage income.
“Survey results show that brokers have communicated to policyholders that AIG’s insurance subsidiaries are secure,” said David K. Bradford, EVP and Chief Knowledge Officer of Advisen. “However, while brokers have been a force for calm in the marketplace, survey responses indicate that brokers don’t yet know how much diversification clients will seek, or whether this crisis will impact overall market pricing or brokerage income.”
This Special Report is based an exclusive survey conducted by Advisen from September 26th-30th with 611 respondents Almost 65 percent of respondents described themselves as “executive management.” Eleven percent classified themselves as “producer,” and a similar number as “marketer/broker.” Almost 20 percent of participants worked for one of the four largest brokers.
“In conversations with brokerage firm executives attending this week’s CIAB Insurance Leadership Forum the story lines are the same as when we surveyed brokers a week ago” said Thomas P. Ruggieri, CEO of Advisen from the conference in Las Vegas. “Execution risk of the asset sales has been cited as a common concern among brokers. They also worry about potential of breaking up the commercial P&C units. While brokers are watching ratings actions carefully, they are comfortable with the present security of AIG’s property & casualty subsidiaries.”
The eleven-page Advisen Special Report on the Broker survey results is available here:
https://www.advisen.com/downloads/BrokersSpeakOutonAIG.pdf.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_ueJ1f-Non39WtbjHZxYIDluK_tVRfw_WDsjbEH0IfNMWMouYLJpu8lLAzGiMXl0cDldUlNrcnzNm530zpPny0oBvRsZRRe8qckI5xtAr9IfJAbLAaeOSOLXc6BfdWs0qrAD49oPmaiqhBKb_h3TSao=s0-d)
I thought it noteworthy that 47% of brokers said they believe the AIG commercial insurance units will be broken up and they had concerns such as one broker saying "AIG's book of multinationals needs all the the p&c Companies to stay in place worldwide."
AIG uses its marketshare as leverage and this isn't always appreciated, as one broker said, "Couldn't have happened to a more appropriate carrier! As you sow, so shall you reap!"
Others disagreed: "The knee jerk reaction by some brokers to replace AIG is insane. This is not the revenge of Kemper or Reliance, and it's unfortunate that there are so many ignorant brokers out there."
With AIG's stock down over 90% and shareholders diluted 79.9%, AIG employees with stock compensation and stock in their retirement accounts are hurting and other carriers are poaching talent as quickly as they can. One broker summed up their concern as follow "It will be difficult to continue doing business with AIG as in all probabliity the personnel at AIG will change with good people finding new positions with more promise then a wounded AIG can offer.
Some brokers thought they would be comedians: "If AIG fights to to pay claims for/to its insureds, what logic says that AIG will repay its loans to the federal government?"
Some showed appreciation for Advisen which I appreciated, "Thanks for conducting this survey -- I've been curious about what other insurance executives think."
Below is the press release. Contact me if you have questions or trouble getting the full report.
SECOND ADVISEN SURVEY SHOWS THAT BROKERS ARE MORE CONFIDENT THAN RISK MANAGERS IN FINANCIAL SECURITY OF AIG COMMERCIAL INSURANCE UNITS
HOWEVER 47% OF BROKERS BELIEVE AIG WILL HAVE TO SELL SOME UNITS; CONCERN EXPRESSED
New York. October 7, 2008 – Advisen Ltd., the leading provider of content, analytics, and technology to the global commercial insurance industry, today released a special report based on a survey of brokers following the American International Group (AIG) liquidity crisis. On the heels of a similar survey of risk managers, Advisen sought to measure brokers’ confidence in AIG after the $85 billion loan by the federal government. “Wary” was how the vast majority of brokers characterized the attitude of their clients towards the unfolding situation at AIG, but with only one respondent claiming that clients are “panicked”, most brokers of commercial insurance are confident in AIG after the federal loan and few are recommending clients switch from AIG.
The Advisen survey of risk managers found that about two thirds intend to get quotes from AIG’s competitors at policy renewal, but according to the broker survey, few buyers have yet given their broker firm instructions to replace AIG. Brokers also opined in survey results about the potential impact the insurance pricing cycle and the potential impact on their fee and brokerage income.
“Survey results show that brokers have communicated to policyholders that AIG’s insurance subsidiaries are secure,” said David K. Bradford, EVP and Chief Knowledge Officer of Advisen. “However, while brokers have been a force for calm in the marketplace, survey responses indicate that brokers don’t yet know how much diversification clients will seek, or whether this crisis will impact overall market pricing or brokerage income.”
This Special Report is based an exclusive survey conducted by Advisen from September 26th-30th with 611 respondents Almost 65 percent of respondents described themselves as “executive management.” Eleven percent classified themselves as “producer,” and a similar number as “marketer/broker.” Almost 20 percent of participants worked for one of the four largest brokers.
“In conversations with brokerage firm executives attending this week’s CIAB Insurance Leadership Forum the story lines are the same as when we surveyed brokers a week ago” said Thomas P. Ruggieri, CEO of Advisen from the conference in Las Vegas. “Execution risk of the asset sales has been cited as a common concern among brokers. They also worry about potential of breaking up the commercial P&C units. While brokers are watching ratings actions carefully, they are comfortable with the present security of AIG’s property & casualty subsidiaries.”
The eleven-page Advisen Special Report on the Broker survey results is available here:
https://www.advisen.com/downloads/BrokersSpeakOutonAIG.pdf.
Thursday, 2 October 2008
What Risk Managers are Saying about AIG
In the wake of AIG's near collapse, there were a lot of rumors about a mass exodus of corporate policyholders of the AIG insurance subsidiaries.
Advisen had 1,000 buyers of commercial insurance complete a survey. Having a 15% response rate means they were dying to speak up.
Most commercial insurance buyers reported to Advisen that, while they are confident in the financial strength of AIG following the $85 billion loan by the federal government, two thirds of AIG commercial lines policyholders plan to get quotes from AIG’s competitors when their policies renew. Excerpting from Advisen’s Special Report, one likely outcome is that AIG will compete vigorously to retain business, potentially intensifying price competition in an already-soft insurance market.
The full report is available by e-mailing corner@advisen.com.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_tRY9crru0YBp_an0hMBU0OaTukXSjmuA-bNOoYbAg8KDBgvt46FS6J_97DdN2GcVOysH17Y0vE9yo8pdE4NuMWNbdbKOO0-BCKUXZUD61VGQiuX3wzJAg1Wdtd3Wmh5ZQkYMf7LwgyP9fWvovmHAG7=s0-d)
Advisen had 1,000 buyers of commercial insurance complete a survey. Having a 15% response rate means they were dying to speak up.
Most commercial insurance buyers reported to Advisen that, while they are confident in the financial strength of AIG following the $85 billion loan by the federal government, two thirds of AIG commercial lines policyholders plan to get quotes from AIG’s competitors when their policies renew. Excerpting from Advisen’s Special Report, one likely outcome is that AIG will compete vigorously to retain business, potentially intensifying price competition in an already-soft insurance market.
The full report is available by e-mailing corner@advisen.com.
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