A short post to illustrate why Sam Friedman’s thesis that more PR spending is needed to turn public perceptions around about P&C insurers is all wet. Not that I’m picking on Sam because the discussion he started is a good one even if I think he has it wrong on why the public holds insurers in such low regard.
First off since I’m a CPA and an investor I know a thing or two about both the Edgar database at the US Securities and Exchange Commission, US GAAP and financial statements so I’m going to take some shortcuts to bottom line this for everyone. (This is Saturday after all).
Earlier today, we covered the FBIC list of bad faith insurers, which our anecdotal collective experiences as Katrina slabbees well bears out on the property and casualty side. How does the loss ratio of a bad faith insurer such as Allstate compare to the number 1 good faith insurer Chubb? The answer is that cutting corners doesn’t equate profit margin. To wit: Continue reading “Good Faith v Bad Faith Insurance Practices: Behind the numbers”