Curiously, the above is actually how things started. At least in the colonies.
Got a fire? Sign up and we’ll save you. Don’t sign up? We’ll savethat guys house because he signed up last month. You can burn.
I purposefully did NOT mention anything about who I work for. The post was about information, not advertising.
Considering that people buy insurance to mitigate risk and that gambling enhances a person’s risk they are pretty much opposite.
Opposite but related. Just one of those oddities of utility theory.
pan
So, Gary is in the Clique[symbol]ä[/symbol], and I keep getting, “Sorry, your application must be lost in the mail”?
Damn the Clique[symbol]ä[/symbol]!
On the subject of reinsurance, a subject about which I know almost nothing, the author Julian Barnes wrote a superbly accessible article explaining the near-collapse of Lloyd’s for the New Yorker. It’s still in print as the chapter The Deficit Millionaires in his book Letters from London … [link].
Need to work on your baking my man. I’d never have got in if it hadn’t been for my muffins.
Without wishing to overly throttle the poor dead thread, I came across this little gem in an actuarial paper (When the Wind Blows: An Introduction to Catastrophe Excess of Loss Reinsurance by D.E.A. Sanders - a document strictly for those interested in Cat XL!). It illustrates nicely the horrors of the LMX and other spirals:
Pretty bad-ass, huh?
Lest you get too despondent, however (and I do know how this must prey on your minds), he does note:
So that’s OK then.
pan
Sitting on the desk in front of me, there’s a piece of paper with a rather large number on it. It’s what it’s going to cost to repair my car after an accident last week. It’s also about equal to my cash on hand. Then there’s the cost of a rental car which I need to get to job interviews, and medical treatment to pay for the curing the effects of getting knocked about. Instead of stressing myself into a tizzy, I’m sitting here downright relieved because my insurance and the other party’s insurance companies are taking care of things. I don’t have to worry about who’s fault it is or if she has enough money. I’m not even going to see a bill from the chiropractor.
I’m lucky. I’ve got relatively low premiums, and, even without the doctor’s bill, this accident will cover the cost of a few years of auto insurance for me, not to mention them taking on a certain amount of shere raw hassle. Right now, the only pain in the neck I’ve got from this accident is a literal one. They were equally good a few years ago when I hit a deer on my way to work.
Why do I buy this stuff? For the same reason I bought a car: because the alternative would be a lot worse.
CJ
(Yes, I told my agent I’d write something like this;))
kabbes, that link doesn’t work. I was at the meeting where actuary Dave Sanders presented that paper in 1995.
BTW it was my impression that a secondary market for cat reinsuracne might be creeping back in. Do you know whether that’s the case?
As someone who’s fairly new car was totalled by a drunk not insured driver- yes you need to have insurance! Now I am tangled in lawsuits and a whole buncha other crap. If someone hits my next car without insurance I am afraid i might kick some hiney.
I remember reading about that several weeks ago, but it was in a dead tree-type document, so I can’t find a cite.
But I understand you can only reinsure your cat against fire and earthquakes.
I Disagree with the OP and agree with everyone else.
I don’t know of anyof you ever noticed but the Insurance companies have way too much power. 2 examples.
A friend’s car dies, cancels his insurance on it, and pretty much permenently borrows one of his parents cars. About a month later he gets a letter in the mail that says he has to provide proof of insurance for his dead car, he doesn’t have it, and gets his license suspended. He eventually beats the charges, but it took time and money.
A former co-worker of mine got a DUI and lost his license. He sold his car to pay for all his legal fees, reinstatment fees, fines, etc. When he tries to get his license back, he found out that he has to get a special type of auto insurance EVEN THOUGH HE DOESN"T HAVE A CAR!
All I can say is WTF?!?!?!?!
Oh buggeration. Try this. Though, as you note, it is an old paper. The true cat connoisseur is much better served by “The Management of Losses Arising From Extreme Events”, which was presented at this year’s GIRO. Actuaries who want it should find someone who has a suitable password (or e-mail the UK Institute to get one), go to www.actuaries.org.uk , do a search for “GIRO” and follow the links to the papers. People without a password or alternative actuarial access are gonna be S.O.L though I’m afraid.
Ah yes, small world this GI actuarial one 
First, the obligitory joke on the typo: Reinsuracne? What’s that? Insurance against teenage personal problem? B’dum tsh.
Now that’s out the way.
Oh yes - the same old problems just keep on coming round. 1995 was 2 years after the establishment of Equitas and the various spirals were still vicious memories. But we forget so quickly. Even by 1998 contracts like Steamship Mutual (admittedly PA and not Cat, but same comments apply) were playing merry havoc in the secondary market. My comment, “So that’s OK then” was merely supposed to be an ironic nod to those in the know.
As long as we have brokers earning 40% commission, we’ll have incentives for them to extend the life of a claim. And as long as we have underwriters who think they can beat the reinsurer, we’ll have companies willing to take it. These problems will be knocked on the head for a few years after major market issues, but like the hydra they just keep on coming back.
pan
With huge apologies for using the SDMB - and the pit in particular - as a chat-proxy: december, through some kind of staggering other-worldly coincidence, I got an e-mail today telling me that David Sanders is giving a talk next Wednesday! What do you think - is he worth going and listening to?
pan
How is it that the insurance company has too much power in either of those examples? The insurance company isn’t requiring your friends to have insurance. The state is.
As for your DUI friend…if he’s trying to get his license back I assume he intends to drive a car at some point. If you’re going to drive a car but don’t own one you still need to be insured. There are special policies for drivers who don’t own cars. They’re called Named Non-Owner policies. Or he needs to have his parents list him as a driver on their policy, which may or may not be the proof of insurance he needs, depending on what the law is in your state.
I live in NJ and auto insurance here is a fucking scam. The state has decided to let the companies do whatever the hell they want and its the consumer who gets raped because of it. I’m paying $3600 a year for BARE MINIMUM car insurance with a perfect driving record and about a %20 discount for various reasons.(it’s more than I paid for my goddamn car)…that being liability, if I get in an accident that doesnt involve another driver I get to pay for any and all damages out of my own pocket. To make it even better, my provider threatened to leave the state so the state gave them MORE leeway…I just got the letter yesterday and my premium went up another $600!!! Maybe it is the law, maybe it is necessary, but that doesn’t excuse the fact that myself, and most residents of my state, are being anally raped by these companies every chance they get. I’m usually in favor of keeping the gov’t out of things but this is one instance where the feds need to do some serious regulation.
Absolutely!