Personal Lines Question

[d's insurance store]

My question is offered with the full knowledge that in the world of insurance, an agent cannot win nor retain every account, despite his/her best efforts, and to carry around every 'lost' account in one's belly is an inviation to lunacy.

But that said, is anyone, primarily in California, noticing how a handful of direct writing personal lines companies have pretty much thrown out the underwriting manual and are taking some pretty bizzare property risks at preferred rates?

I've had Protection Class 10 dwellings with no on site municipal water, only a well fed tank, on a dirt road 5+ miles from a responding volunteer fire dept go to State Farm at preferred rates. I've had a dwelling high up on an urban hill, on pier/post stilts, surrounded by urban brush to go CSAA. And most recently, a home with a pending 'farm' exposure, on well water with tank, no hydrants, 5+ miles on a two land winding road from responding fire station go to another direct writer at preferred rates.

I know that California personal lines companies are hungry in this slower market, and risks that just choose to do business someplace else have never bothered me. But when underwriting rules are completely suspended in the interest of market share, doesn't it seem as though the actuarial tables are being stretched a bit?

Just wondering...

[independent guy]

We're starting to see underwriting ease up beyond common sense here in IL too. I think this is the beginning of the cycle... Once claims start coming in, rates will start escalating again.

[CATHIEA]

For all you new agents out there..... welcome to the beginning of the soft market. This is a time of insanity in the industry. Let us all hope it doesn't last as long as the previous one.

[wlunday]

Geeze... I thought it only happened in Washington State! I have (had) an insured that suffered a total loss, cause unknown fire. The claim isn't even settled yet, we're still seeing bills for ALE's... The fire started 15 minutes after the owner left to go fishing, and started on his back porch (where the wife always made him smoke)...

Anyway, since it's not yet on his CLUE report the local Country Companies agent got his new home issued at preferred rates! Go Baby!
(And, good riddence!).

Swymmer

[d's insurance store]

And the ultimate craziness in your story is apparently there will be no home inspection by the new carrier. Or maybe there will be and the underwriting team figures what's already destroyed can't get any worse, and when the home is rebuilt, it will be as good as new.

I cynically wonder if the new carrier is giving a 'new home' discount because of the claim rebuilding?

And to the responder who wondered if I am new to the biz...no, not really. Let's see, 1983.....that gives me 24 years and I've never seen underwriting compromises in personal lines like this.

[crossins]

Am not involved with Personal lines, but in c/l we have seen this for 2 years now in the Northeast. Market still remains hard for coastal risks, and accouns with a lot of "hair". How about keeping a renewal for 40% less comission? This scenario is reality for middle market c/l.

[Porter]

I see this happen all the time. That is why their rates are so high. I have told clients with similar situations that you mention to check around because we don't have an admitted company that will write you. When they don't call back I usually find out that some rookie Farmers agent wrote it.

[d's insurance store]

I see this happen all the time. That is why their rates are so high. I have told clients with similar situations that you mention to check around because we don't have an admitted company that will write you. When they don't call back I usually find out that some rookie Farmers agent wrote it.

Well, sure, I've had the same thing happen. But, shouldn't the attributes of the dwelling be picked up on an assumed inspection? Even my most 'liberal' property carriers conduct inspections.

I understand a newbie agent with a captive appointment writing whatever the phone brings in...I was in that position myself 20+ years ago. But the crux of my original question is the really fringe stuff that even in my most expansive underwriting throughts does not belong in a preferred personal lines property book.

[mica.cooper]

1. Yeah, maybe a Farmers agent did write it, but not necessarily with Farmers. I work with a lot of carriers and Farmers agents are a large source of new business. I know of one carrier where 70% of its book is from Farmers agents.

2. There is a change in the philosophy. There is a write it now, underwrite it later attitude due to the market. Almost every company is getting less new business.

I have seen a carrier that was 'closed' for new business open up. I have also seen other carriers get tougher. The ones taking everything are definitely in for some work.