ASI

Reinsurance costs will hit many homeowners

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June 30  |  ASI, Florida, News  |   Danielle Szeliga

TRAGEDIES AFAR AFFECT FLORIDA

The Tokyo earthquake, three quakes in New Zealand, floods in Australia and tornadoes in the Midwest gave reinsurers their worst spring ever, pushing up the cost of hurricane coverage, a critical purchase for Florida insurers who cannot stay in business without it.

At the same time, a new hurricane computer model used by the industry has tripled risk estimates for areas once considered safe, while reducing the credit given to newer homes.

The double hit means Florida carriers must pay more for reinsurance, and must buy more of it, to insure houses they covered for much less just last year.

Ultimately, insurance executives say, it will be consumers who pay.

“It will lead to rate increases, there’s no question of that,” said John Auer, president of the American Strategic Insurance group, whose companies will shell out an added $250 million to buy hurricane coverage for 2011.

Florida’s rising insurance costs demonstrate how the state’s growing dependence on global reinsurance puts it at the mercy of events far beyond its borders.

With the retreat of Allstate, State Farm and other well-funded national carriers, Florida now relies on smaller, leveraged carriers that purchase hurricane protection from the largely offshore reinsurance industry, whose rates are unregulated and are notoriously volatile.

This spring, a number of Florida insurance companies were hard-pressed to find and afford adequate protection in a state that historic averages show is overdue for storms.

Documents obtained by the Herald-Tribune show the bill is straining already fragile carriers, leaving some short of the long-standing criteria that they be able to survive and pay claims from a 100-year storm.

The full price tag for insurance companies and consumers will not be evident for months.

Brokers and insurance executives say Florida reinsurance prices spiked 10 to 15 percent, but the cost to insurers depends on how greatly they were also affected by the changed computer risk model.

Consumers can expect to see increased bills in late fall, after carriers file for rate hikes.

Florida lawmakers in May sought to make it easier for insurers to pass on reinsurance spikes to consumers. The new legislation requires that regulators expedite approval for increases as high as 15 percent in as little as 45 days.

The bill’s most vocal opponent, Sen. Mike Fasano, R-New Port Richey, said the law has actually encouraged rate increases by signaling to reinsurers how big an increase state regulators would approve.

“It’s why they were pushing so hard to get the bill passed and sent to the governor,” Fasano said. “Now we’re paying the consequences.”

‘Blood in the water’

The price and availability of reinsurance is notoriously volatile, fluctuating with financial markets and disasters.

For the past two largely uneventful years, Florida’s reinsurance prices were steady, if not falling. But this spring the global reinsurance industry suffered its worst first quarter ever. Disasters around the world — the Japan quake and tsunami, three earthquakes in New Zealand and multiple tornadoes in the American Midwest and South — caused an estimated $48 billion in insured losses.

The toll was twice what reinsurers counted on losing for the entire year and erased half the world’s excess reinsurance capacity.

The situation left the insurance industry wary of its biggest annual gamble — a Southeast hurricane.

After months of assurances that reinsurance rates would not rise, they did just that, spiking in May as Florida carriers entered the market to negotiate their 2011 contracts. The shift put some Florida carriers in a bind as they attempted to negotiate with reinsurers who knew they had captive buyers.

“Reinsurers smelled blood in the water,” said Locke Burt, a former state senator who is president of Jacksonville-based Security First Insurance.

The spate of disasters has changed the psychology of the market, said Neill Currie, the chief executive of Florida’s largest provider of hurricane reinsurance, the Bermuda-based Renaissance Reinsurance.

Speaking at a New York investment conference earlier this month, Currie said both insurers and reinsurers are braced for larger losses, even as reduced capital makes the remaining money a more precious commodity.

“Never underrate fear or greed,” Currie said. “It’s a shame for the human tragedy, but fear is a pretty good thing to focus the mind and make people want to charge the right amount for taking on exposure or make people want to buy additional coverage.”

RenRe is capitalizing on the opportunity, just as it did after Hurricane Katrina triggered market shortages in 2006.

This month it raised an added $100 million to expand DaVinci Reinsurance, a venture it co-owns with State Farm. DaVinci, whose customers include Florida’s weakest carriers, now has the ability to sell additional reinsurance while others pull back — and prices rise.

Having to buy in that market puts Florida insurers in a tight spot, said Burt of Security First. His said his company must now set aside $43 for every $100 in premium to pay for reinsurance, up from $37 last year.

‘Geeks in the back’

While reinsurance prices trouble Florida carriers, it is the computer model that determines how much coverage they must buy that aggravates them most. It will probably be the biggest factor behind rate hikes passed down to consumers.

The RiskLink program, created by California-based Risk Management System, is one of the most widely used catastrophe models, especially among Bermuda reinsurers who use it to price Florida coverage and indicate where to limit sales.

Ratings agencies also use the program to tell insurers how much reinsurance they need to keep a sound financial rating.

RMS’ February upgrade factored in data from recent storms, including Hurricane Ike, which strafed Texas in 2008 and caused flooding as far east as the Florida Panhandle.

Based on that data, RMS increased the expected strength of hurricanes as they move inland and reduced the benefits of new building codes.

The result of the computer model is that hurricane risk is now 300 percent higher in Orlando and other inland reaches of Florida. Meanwhile, the state’s hottest coastal strips saw risk decrease, including a 65 percent drop in Key West, where few private insurers will write a policy.

The results run contrary to the business plans of Florida’s most cautious insurers, which had sought to limit risk by insuring new homes built far away from the coast.

“The companies with the worst book of business got hit the least,” said Auer, whose own company saw hurricane risks increase by 90 percent.

Insurance executives who spoke with the Herald-Tribune contended the software contains the largest increase yet in Florida hurricane risk, and that its numbers are flawed.

“You need to buy 50 percent more (reinsurance) because the geeks in the back room changed their mind,” Burt said.

While RMS had warned Florida insurers to expect risk increases of 25 percent, a brokerage report shows the hurricane exposure for many Florida insurers rose 50 percent. Individual carriers reported their risk had nearly doubled.

Among them is Old Dominion, which told state regulators this month its potential hurricane loss has jumped from $126 million to nearly $200 million.

It will take years for insurers to adjust where and who they insure. In the meantime, they can only buy more reinsurance.

American Strategic and Security First are among the companies challenging the RMS model. Auer said RMS’ response so far has been “cautious.” The company released a statement to a trade journal acknowledging only that acceptance of the new software has been slow.

“We don’t think it’s completely right,” Auer said. “My frustration is that the old models were based on over 100 years of history. Why would they change the assumptions so drastically based on a couple of storms?”

SHUW Offers Up New Office Lessor’s Risk Property Program

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July 14  |  ASI, News, Safe Harbour Underwriters  |   admin

Safe Harbour Underwriters Offers Up New Office Lessor’s Risk Property Program

July 14, 2009

As part of our ongoing strategy to provide our agents with additional products, we are pleased to announce the launch of a new program created specifically for Office Buildings and Office Condominium Associations. This is an exciting growth opportunity for us and our agency partners!

We thank all the agencies that provided valuable insight into this market segment as we researched and developed the program.

Effective immediately our agents can submit an Acord Application and our Supplemental Application to secure a quotation. Specific Underwriting Guidelines, Policy Form and Supplemental are attached under separate cover.

Our Office Lessor’s Risk product is a tailored insurance program for its target market of small to medium sized Office Buildings and Office Condominium Associations. This program provides broader features, advantages and benefits that go beyond the policy.

Program Features*:

  • Competitive pricing for targeted accounts.
  • Admitted company… American Capital Assurance Corp., B++ Good.
  • Special Perils (ISO based Forms).
  • Business Income.
  • $2,500,000 – $10,000,000 in total insurable values (higher limits available).
  • Deductible Options (e.g. Hurricane, Wind/Hail, Occurrence, Calendar Year, 3%/5%).
  • Replacement Cost.
  • Mechanical and Electrical Pressure Systems Breakdown Protection.
  • Property Inspection Program, Catastrophe Planning Program & 24/7 Claim Service.

*The coverage information outlined herein is a guideline only; refer to actual policy for full terms, conditions, exclusions and limitations.

We are confident that this new program will be met with the same enthusiasm and success as our Condominium Association and Apartment Program!

The Office Lessor’s Risk Property Program “Policy Forms” (and supplemental) are available online at www.asicorp.org by logging in using your agent identification code and viewing the Policy Forms section.

In addition to the above, visit us online at www.shuw.org. Click on Products, Forms & Questionnaires and follow the menu to Office Lessor’s Risk Pogram.

As always, thanks for the business, partnership and your continued support!

Sincerely,

Safe Harbour Underwriters, LLC

SHUW Launches New Condominium Association Liability Program

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May 15  |  ASI, News, Safe Harbour Underwriters  |   admin

Safe Harbour Underwriters Launches New Condominium Association Liability Program

Effective: 5/15/2009

Safe Harbour is pleased to announce our General Liability Program including Hired and Non-Owned Auto protection for eligible Condominium Associations is available!

The addition of a separate liability policy is a perfect compliment to our broad property coverage.

This new program is offered through American Strategic Insurance Company (ASI).

The Condominium Association Liability Program offering was developed in response to our agent’s request to streamline their marketing efforts by having Safe Harbour quote their Property and General Liability.

We have moved toward a more efficient insurance placement for our agents who can now spend more of their time on the complex work of evaluating and meeting customers’ needs.

This new Liability Program gives us the ability to rapidly quote and bind qualified accounts at competitive rates.

Effective immediately, our agents can submit the Acord Liability Application and Property and General Liability Supplemental Application (in addition to our property submission requirements) to secure a Property and Liability quotation.

Our new Property and General Liability Supplemental Application is available online at www.shuw.org. Click on Products and follow the menu to Forms/Questionnaires to secure a copy of the new combined supplemental application.

In addition to the above, the General Liability Policy (and new supplemental) are available online at www.asicorp.org by logging in using your agent identification and viewing the Policy Forms section.

Comprehensive General Liability Highlights:

  • $1,000,000 – Occurrence Limit
  • $2,000,000 – Aggregate Limit
  • $1,000,000 – Hired & Non-Owned Auto
  • $5,000 – Medical Payments (per person)

Coverage Summary*:

Premises Liability; Products & Completed Operations; Contractual Liability; Incidental Medical Malpractice; Broad Form Property Damage; Personal Injury Liability (Incl. Libel, Slander, False Arrest, Malicious Prosecution & Defamation of Character)

*The coverage information outlined herein is a guideline only; refer to actual policy for full terms, conditions, exclusions and limitations.

As always, thanks for the business, partnership and your continued support!

Sincerely,

Safe Harbour Underwriters, LLC

FIC Cat Fund Financing Proposal Going to SBA Tuesday

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June 16  |  ASI, News  |   admin

The Florida Hurricane Catastrophe Fund is apparently still wrapping up details of a 2008 hurricane season financing plan to be presented Tuesday to the State Board of Administration.

We don’t have the final plan to distribute, but it could be a $3 billion to $7 billion “put.” This concept was discussed by the Cat Fund Advisory Council during a June 11 conference call and was outlined during the FIC Annual Conference in Key West last week by John Auer, American Strategic, and a member of the Advisory Council.

The Cat Fund created a financial strategy team after it appeared unlikely significant bonding could be produced in a timely manner because of serious problems with New York financial markets. The team consists of Aon, Guy Carpenter and U.S. Re.

According to Auer, several concepts were considered by the group and discussed during by the Advisory Council call, but the most likely to be submitted to the SBA appeared to be the $3 billion to $7 billion “put.”

We will provide additional information if it becomes available this afternoon and will cover the Tuesday SBA meeting. The SBA consists of Governor Charlie Crist, Chief Financial Officer Alex Sink and Attorney General Bill McCollom. The meeting begins at 9:30 a.m.

Florida Trend Cover Story: Small Florida Home Insurers – ASI

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June 1  |  ASI, News  |   admin

A Game of Risk for Small Insurers

Small, Florida-based insurers are snagging market share — but are they the solution to reinvigorating the state’s home insurance market?

by Mike Vogel

American Strategic Insurance, a young Florida home insurance company, did more than just survive the 2004 and 2005 hurricane seasons that sank other insurers and kicked the crutches from under Florida’s crippled property insurance market. The St. Petersburg-based insurer lost only $1.5 million in the first storm year and turned a $3.2-million profit in the second.

Meanwhile, as overexposed State Insurance News Farm and Allstate shed Florida policies, American Strategic was growing — to 257,000 policies. As hurricane season opens, the 11-year-old group says it’s fortified for trouble, structured financially to withstand a cataclysmic 1-in-250 year storm. By contrast, Florida’s largest insurer, state-subsidized Citizens Property, as of April had the underpinnings to withstand only a much smaller storm: Anything larger than a 1-in-68 year event means Citizens will need to levy charges on the policyholders of all Florida insurance companies.

American Strategic is in a growing class of companies known as domestic insurers. Formed under Florida law and founded in the main by Florida entrepreneurs, most domestics are less than a decade old and generally only do business here — a state-specific orientation almost unique to Florida. The cadre of domestics has grown rapidly and now holds 34% of the Florida market. One, Fort Lauderdale-based Universal Property & Casualty, has become Florida’s fourth-largest insurer, with more market share in Florida than Nationwide and USAA.

The advent of the domestics looks to be an unqualified success for a state struggling to make homeowners insurance affordable and available. Certainly, both state officials and industry executives are heralding the domestics’ growth. Domestics are “filling a very important void right now,” says David Sampson, president and CEO of Property Casualty Insurers Association of America. Says Florida Insurance Commissioner Kevin McCarty, “The growth of the Florida domestic market is critical to the rebuilding and revitalization of our marketplace.”

Critical, but as American Strategic CEO John Auer indicates, they are far from a cure-all.

Auer, a veteran insurance industry executive, saw opportunity in 1997 when he and his management team assembled $6 million in seed capital to found American Strategic. (Auer and his management team control 52% of the group; the rest is owned by one of the largest reinsurers in the world, Bermuda-based XL Re Ltd.)

Auer wanted to be a “premier operator” known for disciplined underwriting. Many insurers say that, of course, but others in the industry hold American Strategic’s success as worthy of emulation. Direct premiums at American Strategic and its smaller sibling ASI Assurance more than tripled in the last five years, reaching $357 million in 2007. Their combined profit in 2007 hit $40 million.

Some domestics got their start taking policies from Citizens or its predecessors. Auer, worried about assuming unknown risks, chose organic growth.

To control risk, American Strategic and other domestics rely on computer models of thousands of potential storm paths. The company evaluates prospective customers based on the age of their homes (and thus what building codes the builders followed), past losses, proximity to water and other data.

‘Mixed Blessing':

Jeff Grady, president of the Florida Association of Insurance Agents, says many agents worry that some domestics lack the claims-handling foot soldiers needed in a crisis. Grady has another concern: Domestics are more highly leveraged, he says. [Photo: Ray Stanyard]

The modeling produces a limit on how many homes American Strategic will write in a particular area — diluting risk and keeping reinsurance costs low. In addition, because it’s a new company, American Strategic can also be more selective. “We have way more than our fair share of newer homes,” Auer says.

Multistate firms like State Farm and Allstate also are trying to accomplish that selective risk-taking, of course. But having built their books of business when seizing market share was the name of the game, the multistates must do it in reverse, by shedding policies.

Holding down reinsurance costs is particularly critical for American Strategic. Most domestic insurers keep a bigger share of the risk they underwrite — meaning they suffer bigger losses after storms and rack up bigger profits when the wind doesn’t blow. By contrast, American Strategic achieves the stability of a traditional multiperil company — fire, theft, etc. — by turning over most of its hurricane risk to reinsurers.

That strategy dampens profits — but minimizes the potential for devastating losses. American Strategic’s worst year, 2004, is a good example. That year, it took in $134 million in direct premiums, turning over $80.5 million — 60% of the total — to reinsurers. But after Charley, Frances, Ivan and Jeanne, American Strategic was on the hook for only $25 million of the $218 million in losses customers claimed; reinsurers ate the rest. In 2006, when no storms hit, the reinsurers enjoyed the feast portion of their feast-or-famine business, clearing $189 million in premiums ceded from American Strategic.

The company differs from its peers in other respects. It employs 150. Most domestics have much smaller staffs and outsource claims handling and support work. The in-house staffing, Auer says, is why American Strategic posted the lowest complaint ratio among the top 20 residential insurers in Florida in 2004.

Not everything has gone according to plan. In 2006, the state offered $250 million in low-cost matching loans, known as the insurance capital buildup incentive program, to help domestics grow. Auer’s team founded — and American Strategic became a minority owner in — a new company, American Capital, that became one of 13 companies that got state loans and promised to collectively write nearly 2 million policies. American Capital’s target market was condo associations, but the company has fallen substantially short of growth projections because of increased competition, most notably from Citizens.

One question domestics face is their staying power. Jeff Grady, president of the Florida Association of Insurance Agents, calls domestics a “mixed blessing.” They sell through independent agents, which is to his members’ benefit. But agents worry these virtual companies lack the claims-handling foot soldiers that companies need in a crisis. They generally don’t have the financial backing that multistate insurers have and are more highly leveraged, Grady says. Florida’s largest insurance failure, Poe Financial, was made up of Florida domestics. A.M. Best and other brand-name services don’t even rate most Florida domestics because of their youth or Florida-only concentration.

Buffett’s Backing:

Famed investor Warren Buffett thinks Citizens’ Insurance securities are a good bet. In a recent Fortune magazine article, Buffett said he’d just bought one of the state insurer’s auction-rate securities that carried a 11.33% interest rate. He’s not worried about Citizens paying up:

If the company incurs losses from a storm, it will pass those losses onto Floridians in the form of higher premiums.Instead, domestics are rated by an agency called Demotech, which gives some domestics only the third-highest rating on a scale of six. “Certainly they’re not as strong as your typical national insurance companies,” says Brian Schneider, a Fitch Ratings analyst who in a March report worried that Florida’s unstable market could collapse after a major storm. McCarty, the insurance commissioner, says the domestics exceed the requirements of Florida law.

With an A-minus rating from A.M. Best, American Strategic doesn’t present the solvency risk its brethren do. (A.M. Best rates State Farm and Allstate both as B-plus.) Because of reinsurance, less than 10% of American Strategic’s $200-million surplus is exposed to catastrophic loss — compared to up to 60% to 80% at some domestics.

Despite his own success, Auer says domestics can provide only part of a solution for Florida. His companies don’t insure mobile homes and won’t write policies that include wind coverage in the Keys and most of the windpool area (coastal Florida) outside of Pensacola, Daytona and Sarasota.

Remember also the emphasis that domestics place on spreading risk geographically. As part of a strategy to have high market share in low population areas and vice versa, American Strategic has a 28% market share in inland Lake County, but less than 1% in south Florida.

Florida-specific insurers can take only so many homes from high-risk southeast Florida and the Tampa Bay area before running out of offsetting low-risk inland homes. To offset huge markets such as southeast Florida, an insurer needs to write polices in other states, even other nations, Auer says.

And recall Auer’s reinsurance strategy. Florida domestics need to stay small to avoid the concentration of risk that makes reinsurance unaffordable. Because of the intricacies of the reinsurance market, the closer a company gets to needing $1 billion in reinsurance, the harder it is to find. Auer says that after 2005 it was difficult to locate $600 million in private reinsurance at a price American Strategic could pass on to customers in an affordable premium. To meet its current needs, it contracts with 43 reinsurers.

Reinsurance and Florida’s “very unstable situation” have prompted American Strategic to expand into Texas and other states. “Enough’s enough” in Florida, says Auer, 54. “We’re not really trying to grow in Florida anymore. You can’t solve the problem with a bunch of real small companies in my opinion. A good indicator things are better is when the big-name companies we’ve all heard of are willing to write here — and that’s going to take high rates.”

Homeowners Insurance Premiums

The state website, Shopandcomparerates.com, lists insurers writing policies Florida, along with premiums. A sample of rates in various counties was compiled in May. Some insurers may have stopped offering coverage in some counties. Average approved rates are based on a 5-year-old, concrete block home, with a current replacement value of $150,000, a $500 non-hurricane deductible, a 2% hurricane deductible, no claims and no wind mitigation discounts.

Sample Homeowners Insurance Premiums

Insurer Cost / County Cost / County

American Strategic $4,081 / Monroe $675 / Alachua

Edison Insurance $2,736 / Miami-Dade $930 / Marion

Florida Peninsula $3,807 / Miami-Dade $1,094 / Marion

Homewise Preferred $3,621 / Broward $2,780 / Collier

Olympus $3,132 / Monroe $2,717 / Miami-Dade

Royal Palm $1,878 / Pinellas $717 / Orange

Security First $1,562 / Palm Beach $1,144 / Escambia

Universal Property& Casualty $1,429 / St. Johns $1,188 / Duval

Source: Shopandcomparerates.com

Insurance Stock Market Today

http://www.floridatrend.com/print_article.asp?aID=49013

2008/2009 FIC Officers and Executive Committee

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May 9  |  ASI, News  |   admin

NOMINATING COMMITTEE

Teleconference Meeting, May 9, 2008

Participants:

  • Chair – George Grawe, Allstate
  • Chair-Elect – Bill Dudley, AFLAC
  • President – Guy Marvin, FIC
  • Member – Kurt Driscoll, FPIC
  • Member – James Tafton, Farm Bureau

The Nominating Committee held a teleconference meeting on May 9, 2008, for the purpose of nominating Executive Committee Members and Officers for the year 2008-2009.

As outlined in Article VI of the bylaws, the following members were recommended by the Nominating Committee to serve on the Executive Committee for the year 2008-2009.

Four regular members selected from domestic insurers:

  • Kurt Driscoll, First Professionals Insurance Company
  • James Tafton, Florida Farm Bureau
  • Tom Koval, FCCI Insurance Group
  • Jon Shebel, Associated Industries

Four regular members selected from foreign insurers writing property or casualty insurance:

  • Angel Bostick, Nationwide
  • Michael Stern, CNA
  • Michael Esposito, Progressive
  • Rob Henderson, USAA

Four regular members selected from foreign insurers writing life, health, or annuities.

  • Mike Jennings, Prudential
  • Marianne Eterno, Guarantee Trust
  • Harry Spring, Humana
  • Bill Dudley, AFLAC

Four regular members at-large, selected by the Chair:

  • John Auer, American Strategic Insurance Company
  • Ed Fandle, Travelers of Florida
  • Gil Valdes, New York Life Insurance Company
  • Peter Corrigan, Florida Family Insurance Company

And three regular members with the highest Florida direct written premiums.

  • Greg Redmond, MetLife
  • Mike Hightower, Blue Cross/Blue Shield
  • George Grawe, Allstate Insurance

Under Article VIII, the Nominating Committee recommends the following officers:

  • Chair – Bill Dudley, AFLAC
  • Chair Elect- Kurt Driscoll, First Professionals Insurance Company
  • Treasurer – James Trafton, Florida Farm Bureau
  • Secretary – Harry Spring, Humana

There being no further business, the meeting was adjourned.

Insurance Journal American Strategic: Golden Haired Boy at Fla. Senate Hearings

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February 6  |  ASI, News  |   admin

American Strategic: Golden Haired Boy at Fla. Senate Hearings

By Brian H. Kern | February 6, 2008

After the Florida Senate Select Committee on Property Insurance Accountability heard testimony from The Hartford and Florida Farm Bureau Tuesday, Sen. Steve Geller, D- Hallandale Beach, said the final group of the day, American Strategic Insurance, “will leave us with a good taste in our mouth.”

American Strategic Insurance Co., was held out in front of the Senate committee like a hero in a white hat who galloped into the chambers to save the day. As senators tripped over each other to praise the 10-year old domestic insurer, others offered caveats.

While agreeing that the senators’ compliments of ASI are valid, Jeff Grady, president of the Florida Association of Insurance Agents, said the insurance company is its own managing general agency and, as such, garners $25 per policy in addition to the allowed 3.7 percent profit on premium, based on the Florida Office of Insurance Regulation presumed factor calculations.

The $25 per policy – adding up to $6.25 million – was not discussed at the hearing. And while ASI said it has approximately 250,000 policyholders throughout the state, company officials also said that they have topped out at that number, not planning to stretch their capabilities any further in the Florida market.

The OIR approved two ASI rate increases totaling 39.5 percent in 2006 prior to the passage of HB1A in January 2007, prompting committee member Sen. Ted Deutsch, D-Delray Beach, to ask ASI CEO John Auer if the company’s current good standing was a matter of timing.

Auer said his company has always had a practice of keeping up to date with current expense needs.

Auer told the committee that his company is profitable and healthy, but that only 4 percent of his company’s policies are written in Broward, Miami-Dade and Palm Beach Counties, consisting of 6 percent of the firm’s exposure.

Still, the senators made no bones about expressing their admiration to Auer for apparently following the mandates of HB1A to a “t”.

Two days after the HB1A became law on Jan.31, 2007, ASI submitted a rate filing increase of 3.7 percent – the OIR’s approved profit margin based on presumed factor calculations. In September 2006 when it came time to file the true-up rating, ASI decreased rates another 9 percent.

Auer said his company does not use a short or near term forecasting model anywhere in its rate determination process – a hot button issue with the other insurance company executives who testified in Tallahassee this week.

http://www.insurancejournal.com/news/southeast/2008/02/06/87073.htm

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