Saturday, July 4, 2015

Insurance rates will rise in 2012: Ace boss

"We're getting more rate increases" as cut-rate competitors stop "bludgeoning the weak," says Evan Greenberg

Insurance rates will rise in 2012: Ace boss

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What's with all the insuance company mergers and acqusitions? Harleysville Mutual, Penn Millers, Delphi/Reliance Standard - just three recent examples of Pennsylvania companies that have announced merger plans since summer.

My colleague Harold Brubaker will be writing more for the print Inquirer. Meanwhile analyst Paul Newsome at Sandler O'Neill + Partners tells one reason insurers are getting more attractive: Rates are going up.

He quotes Evan Greenberg, son of ex-AIG boss Hank Greenberg and boss of profitable insurer Ace Ltd. (which is based in Switzerland, headquartered in New York, and run largely from Philadelphia, where it includes the former Insurance Co. of North America), in a brief Greenspan-ian discourse:

"Well, you know, I -- you know, I'm kind of a cautious guy about this. I'm not willing to declare that this is a future trend, but we have been seeing it now for a couple of quarters and it is -- it is -- the floor is continuing to firm and we're -- and where we were getting rate increases, we're getting more rate increases now than we were a quarter ago.

"And we're even seeing that, as I said, for September the rate was even better and more classes are achieving that.

"What you're finding is the marketplace in general is unwilling -- less and less willing, there are always cowboys and outliers there, but less and less willing to go along with any rate decrease and, in fact, brokers are -- you know, are less and less requesting rate decreases or bludgeoning the weak to give them."

Translation: After several years of cutthroat competition, insurance rates are going up again. Watch out for your wallets.

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About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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