Very occasional in fact though Part 1 brought tears to the eyes of Mr CLS over at Yahoo ALL (and I bet he still has that old link) and remains one of our all time greatest finance posts considering Nowdy wrote it. That is not a knock on my partner-in-blog as much recognition that someone who was previously illiterate in high finance could “see-it” around the time we were 6 months old as a blog. This global insurance thing is a complicated critter.
There are people on the bottom of this critter who live here on Main Street. Included in that number are the insurance agents who live in our communities across the coast from Bar Harbor, Maine to Brownsville, Texas. A few years ago, at an insurance forum similar to the event held today at USM Gulf Coast, Congressman Taylor was heckled by an irate insurance agent who was forcibly removed from the building by security. Today during Q&A State Farm agent Elvis Gates told the panel he was behind their efforts 100% as he didn’t get paid on policies he didn’t sell. My own agent’s office mostly looks deserted during business hours. These days everyone is feeling the pain. Elvis seems like he is a sharp guy.
The marketplace demands a single solution in an all perils policy. With State Farm pulling out the NFIP after being caught with their hand in the taxpayer cookie jar agents like Mr Gates have been made a casualty along with the rate paying public in the communities where they live. My own personal observation is that Allstate agents are farther along the path to disillusionment after being sacrificed en mass during the evil reign of Ed Liddy. Our readers may remember ol’ Ed was brought in to right AIG during the financial implosion in 2008.
Is the lack of a priavte market driven solution symptomatic of a failed marketplace? You betcha it is but when the marketplace is fragmented 50 different ways with each being defined as its own market the reasons for the failure come into sharper focus: The McCarran-Ferguson Antitrust Exemption. Since the “tail risk” associated with Hurricanes can not be spread well by definition insurers can’t take the associated risk without charging loan shark like rates. For states with smaller coastlines like Mississippi the situation and problem then magnifies several times over. Five years after Katrina this problem remains un$olved becau$e $omeone i$ making big money on the current $etup. IMHO our only hope is a Hurricane heads up to DC, takes Pennsylvania Avenue to the Whitehouse and heads straight up Obama’s rectum which in turn should knock his head out of the same.