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Dollytrolley

Underwriting.....thoughts from the back office....

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Lately insurance seems to be burning a hole in the old radar screen so.......

 

In the stone age I would sometimes stumble into a less than stellar aircraft project and often these turkeys were nearly impossible to obtain insurance and some were way too grim to even approach a insurer so we self insured.

 

In the process of dealing with grim projects I came to deal with a fair amount of insurers and a couple of underwriters so recently I made a casual look-see what some of my old geezer--insurance-geeks might find out about the near past and current HDT RV underwriting issues that seem to exist now.

 

OK like all good "Fake News" I got to do the disclaimer here........

 

First underwriters come in all flavors and all sizes and shapes and they tend to play their cards close to their chest so obviously as well as connected as I am I have not hacked any of the servers in their basement (or Hillerizzz) so.........what info I have been given is mostly from the RISK and Demographics side of the spreadsheet that underwriters use in their tool box. Underwriting is a diverse world and as such some smaller markets tend to be "active" and subject to sudden changes as the underwriters review the underlying risks & returns. Perhaps the best analogy to normal folks is that if you have a portfolio of investments sometimes you sell a few of the under performers just to invest in better investments and this is often the case in the small underwriter markets so a underwriter might leave the HDT RV market just to "enter-into-another-small-market" it just might be a underwriter seeking a better market.

 

Other more obvious reason underwriters may leave the HDT RV market might involve:

 

1) Changes in demographics of clients

2) Cost increases of claims

3) Size of policy base

4) High profile events

5) State regulations

6) Federal regulations

7) Other

 

So far what I have gathered is that trends have started to indicate that demographics for the HDT RV market has seen a considerable increase of younger folks buying HDT's and they tend to also buy large trailers as well.

 

Recent claim trends tend to point to increases in costs as the total rig length and the younger operators converge in the market.

 

Several thoughts concerning demographics seem to be summed up in that the younger operators may have better reaction times, vision and stamina but often are prone to attempting risk activities that the older operators tend to avoid so it appears that the lower risk trends favor the more mature operators.

 

Longer length rigs often tax the skills of seasoned operators and often exceed the skill levels of the less experienced operators.

 

Over the legal RV length limit can be a factor in defending a client in a legal action and may increase the legal defense claim costs.

 

Perhaps the largest trend that is difficult to control is the high cost of repair of many of the larger trailers that HDT's tend to tow. Many of the larger RV trailer builders ceased to exist in the downturn and therefor factory supports and parts often do not exist so insurers are saddled with outsourcing repairs to shops that rightly must charge a lot for hand repairs to items that would be much cheaper to replace if the parts were available. Often insures will need to total a trailer these days that would have been repaired just a few years ago.

 

Experience and operator training is a factor being considered in the trends of the HDT RV market. Unfortunately huge piles of data is compiled on class 8 trucks and so the risks of operations are well understood in the commercial markets however the NEAR total lack training in the RV markets can be unnerving to the underwriters and as younger operators enter the HDT RV market trends become more critical.

 

The new government "trend-to-less-regulation" tends to make underwriters very nervous and a nervous underwriter is not a good thing in tiny markets like HDT RV's.

 

Unlike most folks that have a computer full of classified data........the items above are pretty well proven by just looking around the threads on the forum(s).

 

Maybe some things to ponder.....

 

Drive on...........(How does my underwriter feel......today??)

Edited by Dollytrolley

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In the custom Marine world, insurance can be an issue as well. The smaller the brand name and shorter time period the company has been in business, the higher the premiums of your new offshore fishing vessel are.

 

Yes indeed Jim,

 

When I managed the small Marine Barge / Crane outfit I would hold my breath whenever any crane mounted on a barge had any accident.....bad juju...

 

Marine insurance in general can tend to be a adventure especially with the potential for a oil / fuel spill making a small event into national news event and HUGE cleanup costs.

 

Drive on......(Don't rock the ....boat)

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Dolly,

 

You touched on some very good points. Obviously, you gave this some serious thought, way above your pay grade.

 

In thinking about your points, it occurs to me that we may be seeing a larger group of folks entering the Dark Side, who are not as far along in life, thus having less "vested interest" (down payment) in their rig. I once had an agent tell me that your credit score was a big factor in the rate quoted, as folks with good scores tend to have less claims.

 

I've often been self insured on my vehicles, except for liability. That practice served me well when I was among the youngsters who's rates were high. Now, steeping in full "geezerhood", I'm finding collision to be quite cheap, even on toys that were once out of my reach.

 

I wonder what "liability only" would cost?

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Dolly,

 

You touched on some very good points. Obviously, you gave this some serious thought, way above your pay grade.

 

In thinking about your points, it occurs to me that we may be seeing a larger group of folks entering the Dark Side, who are not as far along in life, thus having less "vested interest" (down payment) in their rig. I once had an agent tell me that your credit score was a big factor in the rate quoted, as folks with good scores tend to have less claims.

 

I've often been self insured on my vehicles, except for liability. That practice served me well when I was among the youngsters who's rates were high. Now, steeping in full "geezerhood", I'm finding collision to be quite cheap, even on toys that were once out of my reach.

 

I wonder what "liability only" would cost?

Rickeroo, obviously you have seen my pay stubs ......uh oh I forgot I just pay out these days.

 

Just knowing geeks from the insurance racket just gets me just enough info to be somewhat dangerous, but most of the data fits into the tiny puzzle that makes up the HDT RV market.

 

Presently my rates seem lower than those that I have seen on the forum but our truck and trailer are not worth much so we mostly pay for liability I feel.

 

As a group I suspect that many of the geezers were "abused" by heavy trucks and or farm machinery as kids so these days we might tend to not stick too many body parts into the pickle cutter if you get my drift. For the most part geezers tend to not push the envelope much but as kids I shudder that I survived the "learning curve".

 

The HDT RV is a strange duck in that a microwave and a portiepotty really does not make our truck any different from the grimy freight dogs weaving down the interstate.

Perhaps were we are different is that we lack exposure due to the small amount of miles we travel but that can also be viewed as lack of currency in operations so underwriters tend to look at many factors.

 

The HDT RV is a odd duck so are most of the operators.....so why wouldn't the insurance be a bit odd at times as well??

 

Drive on........(Geezer on........)

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Sneak into the offices one night of one of these underwriters and see if you can get a hold of the spreadsheet of losses. Include insured amounts, ages of the policy owners, and most specifically the cause for the losses. If you can get a ratio of the premiums to paid claims.

Just like a bank doesn't make money if it doesn't take a bit of a risk and loan money, the same for the insurance biz. We might be at a point that there is a loss track record of this business developing, and some poorly managed insurance portfolios are exiting the business, while better managed companies are staying put, some just raising premiums. Small pools don't help, and I would think this is a really small pool, relative to the regular RV business as a whole.

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get a hold of the spreadsheet of losses

The girl across the street that used to be my daughter's baby sitter 20 years ago, graduated from Yale as an actuarial. I'm pretty good at math but, YIKES!

Talk about analyzing down to the gnat's ass. We don't have a chance of figuring this one out.

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The girl across the street that used to be my daughter's baby sitter 20 years ago, graduated from Yale as an actuarial. I'm pretty good at math but, YIKES!

Talk about analyzing down to the gnat's ass. We don't have a chance of figuring this one out.

As usual Steve you have focused out like a Sr Engineer and deduced that the bean-counters (actuarial science) has us by the short hairs and to a certain point that might be true bur......but on a fishing trip up into Northern B C we had a couple of underwriters aboard the old 421 bush beast and we were cruising along on top of a cloud deck in the bright sunshine and I was trying to get the inside scoop on why a couple of aircraft I had were almost unable to be insured.......I ask what numbers in the huge spreadsheets needed to be changed and one of the old grey haired underwriter geezers smiled and said......"well son, you know we do look at a few numbers in the underwriting game once in a while but in tiny markets some mornings we get out of bed and we find out that over night joe-blow just up and bailed out of a tiny market and so our first thought is......what the heck pulled joe's trigger? So we could dive deep into the latest pile of spreadsheets or.......we could just do what Joe did and just bail out of the tiny market (Blue Sky?)....and so by the end of the week it is sorta like a run on the bank or in our slang we call it a bunch of old lady's in a dark room yelling boo at each other."

 

Gulp......so much for the spreadsheets it can be as simple as "herd-think".......now some here might say no way could insurance be at the mercy of rumor or gut-feelings and maybe you have a point .....to much money at stake......just like the stock market, only order and reason prevails...........

 

Drive on........(Booo.....don't get scared.....yet)

Edited by Dollytrolley

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I heard Lloyd's of London would insure anything. ...

 

...well except maybe a Volvo without a toilet with 2 trailers pointing north painted 2 tone in Florida...

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