Posted by nickols@att.net <nickols@att.net>
I'm in the early stages doing some work related to insurance company insolvencies. I know about the guaranty associations, state and national, and I'm aware of a lot of work related to early indicators, etc. I'm also told that these insolvencies are cyclical in nature, which suggests to me some dynamics at work.
Does anyone know of any SD work focused on identifying and modeling the factors that drive the peaks and valleys in insurance company insolvencies?
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Fred Nickols
Posted by nickols@att.net
posting date Sun, 25 Mar 2007 20:40:32 +0000 _______________________________________________
QUERY Dynamics of Insurance Insolvencies
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QUERY Dynamics of Insurance Insolvencies
Posted by Bill Braun <bbraun@hlthsys.com>
I don't have any SD resources per se - pay attention to the underwriting cycle. Broadly generalized, insurance companies lower premiums (below break even) to attract business and then raise them to protect the bottom line. Correspondingly, most revenue is generated by investments. If low premiums and a weak economy coincide, and the loss ratio is higher than predicted, and cash reserves won't cover the gap, trouble ensues.
Posted by Bill Braun <bbraun@hlthsys.com> posting date Mon, 26 Mar 2007 06:44:31 -0400 _______________________________________________
I don't have any SD resources per se - pay attention to the underwriting cycle. Broadly generalized, insurance companies lower premiums (below break even) to attract business and then raise them to protect the bottom line. Correspondingly, most revenue is generated by investments. If low premiums and a weak economy coincide, and the loss ratio is higher than predicted, and cash reserves won't cover the gap, trouble ensues.
Posted by Bill Braun <bbraun@hlthsys.com> posting date Mon, 26 Mar 2007 06:44:31 -0400 _______________________________________________