Home Breadcrumb caret News Breadcrumb caret Industry Industry can meet Sept. 11 commitments, says A.M. Best Although the September 11 terrorist attacks are “unprecedented in scope and complexity,” the industry will be able to meet its commitments, says Larry Mayewski, executive vice president and chief rating officer for A.M. Best. “The direct and indirect impact of this event may not be fully understood for several years,” he notes. A.M. Best says […] October 31, 2001 | Last updated on October 1, 2024 2 min read MPI unable to offer rate reduction Following announcement of higher than normal claims payouts this summer, Manitoba Public Insurance (MPI) is changing its original request to the province for a rate reduction for motorists. Hail storms in August are partly to blame for the decision, which will see MPI “hold the line” on rates yet again. The public insurer had requested a 1.2% reduction in rates, but will now request the same revenue as last year. The reduction would have amounted to about $3 on average per policy on basic auto insurance. “Earlier this week we reported that both the volume and severity of claims filed for the first six months of our fiscal year was up significantly, ” notes Jack Zacharias, president and CEO of MPI. Claims costs were up about 20% for the six-month period compared with last year, and were at “winter time levels”, rather than the expected summer slowdown in claims. Hail damage brought in more than 10,000 claims, forcing MPI to open an emergency claims center and costing the corporation about $3 million. Overall, about 48% of drivers will see rates drop or stay the same, and the rest will see rates go up, with the majority rising by $20 or less, MPI reports. Average premiums collected by MPI in 2002 will be the same as in 1998. Commercial vehicle and motorcycle rates should increase, by 11.1% and 15% respectively, as per MPI’s original rate filing. Trailers and off-road vehicles will, however, see rate decreases as requested by the province’s Public Utilities Board which makes the decision on rate filings. Save Stroke 1 Print Group 8 Share LI logo Jack Zacharias Although the September 11 terrorist attacks are “unprecedented in scope and complexity,” the industry will be able to meet its commitments, says Larry Mayewski, executive vice president and chief rating officer for A.M. Best. “The direct and indirect impact of this event may not be fully understood for several years,” he notes. A.M. Best says that the most recent estimates are in excess of US$30 billion in insured losses, but the long-term implications for insurers “will likely be far greater than the ultimate sum of the paid losses”. Among the anticipated effects are increased rate hardening and a “general flight to quality”, as well as further consolidation and increased demand for capacity. Coverage changes are also expected from both insurers and reinsurers. The rating agency also predicts that the market will see new, “specialty-focused” capital and “the potential for ‘new generation’ capital-market products”. A.M. Best and other rating agencies have continued to assess the impact of the September 11 events on insurer financial strength, with several insurers seeing their ratings downgraded or placed under review as a result. However, several insurers hard hit by the attacks saw their ratings affirmed on the basis of their resources at hand to cover losses. Among these are ACE, AIG, Berkshire Hathaway, Chubb, Royal & SunAlliance, XL Capital, Swiss Re and Munich Re. A.M. Best adds that the “flight to quality” that had already begun prior to September 11 will benefit these companies in the long term. – MPI unable to offer rate reduction Following announcement of higher than normal claims payouts this summer, Manitoba Public Insurance (MPI) is changing its original request to the province for a rate reduction for motorists. Hail storms in August are partly to blame for the decision, which will see MPI “hold the line” on rates yet again. The public insurer had requested a 1.2% reduction in rates, but will now request the same revenue as last year. The reduction would have amounted to about $3 on average per policy on basic auto insurance. “Earlier this week we reported that both the volume and severity of claims filed for the first six months of our fiscal year was up significantly, ” notes Jack Zacharias, president and CEO of MPI. Claims costs were up about 20% for the six-month period compared with last year, and were at “winter time levels”, rather than the expected summer slowdown in claims. Hail damage brought in more than 10,000 claims, forcing MPI to open an emergency claims center and costing the corporation about $3 million. Overall, about 48% of drivers will see rates drop or stay the same, and the rest will see rates go up, with the majority rising by $20 or less, MPI reports. Average premiums collected by MPI in 2002 will be the same as in 1998. Commercial vehicle and motorcycle rates should increase, by 11.1% and 15% respectively, as per MPI’s original rate filing. Trailers and off-road vehicles will, however, see rate decreases as requested by the province’s Public Utilities Board which makes the decision on rate filings. Although the September 11 terrorist attacks are “unprecedented in scope and complexity,” the industry will be able to meet its commitments, says Larry Mayewski, executive vice president and chief rating officer for A.M. Best. “The direct and indirect impact of this event may not be fully understood for several years,” he notes. A.M. Best says that the most recent estimates are in excess of US$30 billion in insured losses, but the long-term implications for insurers “will likely be far greater than the ultimate sum of the paid losses”. Among the anticipated effects are increased rate hardening and a “general flight to quality”, as well as further consolidation and increased demand for capacity. Coverage changes are also expected from both insurers and reinsurers. The rating agency also predicts that the market will see new, “specialty-focused” capital and “the potential for ‘new generation’ capital-market products”. A.M. Best and other rating agencies have continued to assess the impact of the September 11 events on insurer financial strength, with several insurers seeing their ratings downgraded or placed under review as a result. However, several insurers hard hit by the attacks saw their ratings affirmed on the basis of their resources at hand to cover losses. Among these are ACE, AIG, Berkshire Hathaway, Chubb, Royal & SunAlliance, XL Capital, Swiss Re and Munich Re. A.M. Best adds that the “flight to quality” that had already begun prior to September 11 will benefit these companies in the long term. – MPI unable to offer rate reduction Following announcement of higher than normal claims payouts this summer, Manitoba Public Insurance (MPI) is changing its original request to the province for a rate reduction for motorists. Hail storms in August are partly to blame for the decision, which will see MPI “hold the line” on rates yet again. The public insurer had requested a 1.2% reduction in rates, but will now request the same revenue as last year. The reduction would have amounted to about $3 on average per policy on basic auto insurance. “Earlier this week we reported that both the volume and severity of claims filed for the first six months of our fiscal year was up significantly, ” notes Jack Zacharias, president and CEO of MPI. Claims costs were up about 20% for the six-month period compared with last year, and were at “winter time levels”, rather than the expected summer slowdown in claims. Hail damage brought in more than 10,000 claims, forcing MPI to open an emergency claims center and costing the corporation about $3 million. Overall, about 48% of drivers will see rates drop or stay the same, and the rest will see rates go up, with the majority rising by $20 or less, MPI reports. Average premiums collected by MPI in 2002 will be the same as in 1998. Commercial vehicle and motorcycle rates should increase, by 11.1% and 15% respectively, as per MPI’s original rate filing. Trailers and off-road vehicles will, however, see rate decreases as requested by the province’s Public Utilities Board which makes the decision on rate filings.
