If you’d like to read the rule itself, here is the link to the 66-page doc.
http://tiny.cc/0in1u

Your insurance carrier has a measure by which they can determine whether or not they are making a profit or losing money; it is called the combined ratio. A combined ratio of 100 is breaking even, a combined ratio of less than 100 is making money and you guessed it, a combined ratio of more than 100 is losing money or in other words for every dollar an insurance company earns if they pay out less than that dollar they are profitable and if they pay out more than dollar they are losing money.

Let’s look at the past several years and discuss the reasons many companies’ loss ratios are now in excess of 100.

• Many companies have scrambled to write business and they have slashed prices and made poor underwriting decisions in order to do it.
• Insurance companies have incurred an extremely large number of catastrophic (CAT – Hurricanes, Tsunamis’, Forest Fires, Hail etc.)losses.
•  Insurance companies have experienced a significant decrease in investment income from stocks, bonds and real estate holdings which has hampered the ability of insurance companies to offset their CAT losses.
•  A decrease in premiums being earned by insurance companies because of their customers  going out of business or downsizing and homeowners losing their houses or not paying their car insurance; you get the idea.

Insurance companies also purchase this little thing called “Re Insurance”. Re Insurance is purchased by insurance companies to help them, in the event of a significant (CAT or Other) loss, absorb the cost and lessen the blow, so to speak.  That being said, the cost of Re Insurance is going to cost the insurance companies more and will be reflected in your cost of insurance.

So, what do we do now? Insurance agents need to analyze the factors that will impact the cost of insurance for clients now and in the years to come. Agents must realize that if an insurance company has a loss ratio of well in excess of 100 and their investment income is not helping to offset their losses, and they have premiums declining or disappearing then they will have to do something, and that something is to increase price or to reduce cost. Since many companies have already reduced cost, it is my belief that the second tactic is now going to be used and they will increase premiums.

We have been monitoring all of our insurance carriers over the last  year and are actively remarketing accounts to make sure that our accounts are with a  company with a low combined ratio. It is my belief that these companies will be able to weather the storm better and manage premium cost to customers better, both now and in the years to come.  I have seen numerous articles by companies stating that if they did not have the CAT losses they would be close to a 100 combined ratio or less – well guess what? The CAT losses are real, they did happen 3 years in a row and now we have to deal with them.

If I can be of help, please feel free to contact me at 513-322-5637 or rob@commercialinsuranceohio.com.

Sincerely,

Rob Ludwig

Managing Partner

Army/Navy Game 2010 – Philadelphia

This past weekend I had the opportunity to see the Army/Navy game in Philadelphia.  The term “Bucket List” has become popular since the movie rolled out last year. I will tell you this though – if you have one make sure that you add the Army/Navy game to it. The patriotism that pours out of the stadium is overwhelming. This event truly makes you appreciate your freedom and the ones that have fought and given their lives for ours.  To all of the Men & Women that have and do serve – God Bless!

http://www.bankrate.com/financing/insurance/rear-ended-by-the-crash-tax/

It’s an increasingly common scenario around the country: a driver causes an accident, their auto insurancepays the claim, and weeks later, the motorist receives a bill for hundreds, perhaps thousands of dollars for local emergency police and fire responders called to the scene. An accident response fee, nicknamed the “crash tax” by irate auto insurance customers who’ve been blindsided by one, is an extra fee charged by jurisdictions to at-fault drivers for a variety of emergency response services, from jaws-of-life vehicle extraction and hazardous materials cleanup to traffic direction…

According to AccidentResponseFees.com, a Web site operated by the Ohio Insurance Institute trade group, 10 states have banned accident response fees to date: Alabama, Arkansas, Florida, Georgia, Indiana, Louisiana, Missouri, Oklahoma, Pennsylvania and Tennessee. The site offers sound advice on what to do should you receive an accident response bill. Short of moving to one of the above-mentioned states, of course. 

Editor’s note: Michael Snyder is editor of theeconomiccollapseblog.com

The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and “free trade” that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn’t tell us that the “global economy” would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

Here are the statistics to prove it:

•    83 percent of all U.S. stocks are in the hands of 1 percent of the people.
•    61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
•    66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
•    36 percent of Americans say that they don’t contribute anything to retirement savings.
•    A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
•    24 percent of American workers say that they have postponed their planned retirement age in the past year.
•    Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
•    Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
•    For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
•    In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
•    As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
•    The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
•    Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
•    In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
•    The top 1 percent of U.S. households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.
•    In America today, the average time needed to find a job has risen to a record 35.2 weeks.
•    More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
•    or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
•    This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
•    Approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.
•    Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
•    The top 10 percent of Americans now earn around 50 percent of our national income.

Giant Sucking Sound

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new “global” labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are “less attractive” than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of “chronically unemployed” is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.

But you can’t raise a family on what you make flipping burgers at McDonald’s or on what you bring in from greeting customers down at the local Wal-Mart.

The truth is that the middle class in America is dying — and once it is gone it will be incredibly difficult to rebuild

A look at Ohio homeowners insurance rate increases
Cincinnati Enquirer July 20, 10 By the AP    FULL TEXT

Homeowners insurance rates jumped an average of 9.7 percent in Ohio last year. Here’s a look at 2009 individual rate increases among the top 10 homeowners insurance groups in the state:
1. State Farm, 12.1 percent.
2. Allstate Insurance Group, 7.2 percent.
3. Nationwide Corp., 14.3 percent.
4. Grange Mutual Casualty, 6 percent.
5. Liberty Mutual Group, 4.6 percent.
6. Cincinnati Financial Corp. -2.1 percent.
7. Westfield Group, 15.9 percent.
8. Erie Insurance Group, 9.5 percent.
9. Auto Owners Group, 7.3 percent.
10. Zurich Insurance Group, 11.3 percent.
SOURCE: Ohio Department of Insurance

Cowboy Logic And Economics

Most of you probably already know that the Bush tax cuts expire the first of the year, and that’s bad.  And no, I’m not talking about a bunch of fat cats not having the money to buy another condo or take a vacation on the French Rivera.

That’s a common problem that a lot of people make when they believe that old Democrat mantra, “tax cut for the rich.”  They think that people who make a lot of money just don’t pay their fair share in taxes.

Actually, a small percentage of the big money earners pay the lion’s share of the taxes collected by our government, and at the same time keep the wheels of commerce turning by their investments of the money they save on taxes and create jobs by starting new businesses.

When the government gets a dollar, it takes seventy cents of it to sustain the bureaucracies it’s drained through and only thirty cents is available to finance the military, build interstates and whatever else the government spends it on.

Government spending is inefficient and wasteful, not even counting what the greedy Congressmen and Senators can suck out of our taxes for earmarks and downright foolishness.

So what are taxes?

Simple, you take money away from some people and give it to other people.  You don’t create more wealth or more money, you just transfer money from one person to another.  It’s known as redistribution of wealth and that is one of the prime intentions of the Obama Administration.  They’ve as much as said so.

I believe in charity, I believe in welfare for those who deserve it, but when government entitlements are passed out just to buy votes for dishonest politicians, when it encourages four generations of unwed teenage mothers and deadbeat dads it ceases to be welfare and turns into graft.

Barack Obama does not like being called a socialist, but that’s what he is.  Actions speak louder than words and his actions prove he is a socialist.

He believes that every aspect of American life should be controlled by a monolithic central government and believes that the wealth of America should be evenly distributed to every one.

“To each according to his needs and from each according to his ability.”

Do you know who said that?  If you don’t, you need to find out.

It seems that Obama and the Democrats are determined to turn America into a quasi third world nation with the unproductive reaping just as much harvest as the productive ones.

When you begin redistribution of wealth, you open a Pandora’s box of fiscal ruin because you take money out of the hands of people who would put it back into the economy.

How much entitlement money ends up in the pockets of drug dealers, numbers runners and liquor store owners?  How many crack habits are your tax dollars supporting?  How many children fathered by slugs who have no intention of taking care of them are your tax dollars taking care of?

The point is that entitlements beget entitlements and with a socialist in the White House and a bunch of gutless, spineless, greedy vampires in Congress, there will be no end to it.

Now here’s a little common sense.

Suppose a farmer has a bushel of corn and you tax him half a bushel and give the half bushel to somebody who doesn’t work, who just eats the corn and comes back for more the next day.

Now suppose you left it with the farmer; he’d plant it and turn it into many bushels of corn.  He’d sell it to the grist mill and make a profit, who would grind it and sell it to the grocery wholesaler and make a profit, the grocery wholesaler would run it through a processing and packaging plant which employs hundreds of workers, they would draw a paycheck and the wholesaler would hire a truck to take his product to market, the trucking company would make profit, the wholesaler would make a profit when he sold it to the grocery store, the grocery store would sell it to the consumer and make a profit while employing workers to wait on their customers.

In the meantime the guy who just ate the corn, well you know what happens to that.

What do you think?

Pray for our troops, and for our country.

God Bless America

Charlie Daniels
©Copyright The Charlie Daniels Band

I added this recipe to the website under Rob’s Grill – Check It Out