Insurance cos (proposed buy outs, etc. discussion) Message Board

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Non-Tech : Insurance cos (proposed buy outs, etc. discussion)

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To: QuietWon who wrote (28)	11/8/1999 5:32:00 PM
From: Carey Thompson	Read Replies (1) of 55

You are absolutely correct about insurance companies possessing long tail liabilities. But, in my humble opinion, that is the nature of insurance. With insurers the question is not 'whether' the losses will come; but 'when' the losses will come. A good actuary and experience will help in this matter. In 1940s when the shipbuilders were insuring their shipyards, who would have thought abestos insulation would kill and cripple many of their workers, and the survivors and their dependents would sue the shipbuilders? Not many. But, still many insurers survived the abestos suits. I believe most of the guilt and liability was shifted to the manufacturers of the abestos (Johns Manville). I firmly believe, its the nature of insurers to shoulder long tailed losses. Its, also, the nature of insurers to be profitable most of the time. My rule of thumb is 7 years of profits, followed by 1 or 2 years of losses. In the current lean times do not forget plenty is in the future. Plenty is a function of pricing not the nature of insurance. I think.

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