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Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

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Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#111

Post by justin66 »

Spooky23 wrote: post #46
JKCalhoun wrote: post #2

All I see in the article is the discussion of "profits". I would think the PR department could come up with something about "trying to keep costs competitive for our customers" or something like that. Instead they're telling California and Florida customers to take a hike ... along with 11% of their employees. When is the last time we heard a company enact a company-wide, 50% cut in officer's salaries and a freeze on…

What they are really saying is that they can’t effectively model the risk. Say you were an insurer… would you want to take risk for Florida hurricane losses knowing what we know? If we want a functional insurance market in these places, we need a student loan type solution - make the Feds the reinsurer and have the insurance company mostly administer the policy.

> If we want a functional insurance market in these places, we need a student loan type solution - make the Feds the reinsurer and have the insurance company mostly administer the policy.

If the problem is stated that way, I think a lot of Americans are going to realize how little they care about Florida's insurance market.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#112

Post by hypeit »

selectodude wrote: post #90
hypeit wrote: post #51

Earlier quoted context omitted.

> An insurance company is not a charity it’s just a profit engine. Odd then that so many forms of insurance are mandated by the government.

The insurance mandates are for things that impact either your life or other people. I don’t want your judgement proof ass hitting me with your car without the ability to fix it, nor do I want you using emergency medicine as a pediatrician. Thus, mandates.

The problem is when you combine "mandated" with "for profit". The two should never go together. If it's mandated, I want exactly zero of my dollars going toward executive compensation, dividends, stock buybacks, advertising, sales...

You're currently paying for that neat little 3d animated gecko under threat of US law.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#113

Post by Retric »

mgkimsal wrote: post #9
Retric wrote: post #6

Earlier quoted context omitted.

Investors for one, I get annoyed at overly generous executive pay because it costs me money.

> overly generous executive pay ... it costs me money But how can you prove that? The very justification for generous executive pay is that you couldn't get most people to do that role because it's so demanding and without these particular people, revenue/profits would tank. (slight exaggeration, but I don't think by much).

Overly generous is by definition excessive, not everyone paid at or above market rates is worth it. Someone making 5 million a year could actually be worth the money. So, it’s not a universal failing at every company, but there’s many examples of such things happening.

Private equity is much maligned, but it has turned around some failing companies by gutting upper management then having a new IPO which worked out fine.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#114

Post by hypeit »

Invictus0 wrote: post #73
hypeit wrote: post #51

Earlier quoted context omitted.

> An insurance company is not a charity it’s just a profit engine. Odd then that so many forms of insurance are mandated by the government.

Suppose you are an insurer. You model the risk for your insurance product (suppose it's car insurance) and realize you need to charge $100/mo to make money after paying out all the claims. However, you have a competitor that is bad at modeling risk. They are charging $50/mo for their car insurance, and customers are flocking to them. Should you attempt to stay in this market? If you lower your prices, you will eventu…

> after you pay for marketing

There should be no marketing if it's mandated. These companies should not be run for profit since having insurance is required by law in many situations.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#115

Post by sokoloff »

elteto wrote: post #100
selectodude wrote: post #87

Earlier quoted context omitted.

That federal program is broke as a joke, and it generally comes with extremely high deductibles and poor payouts. It’s easy for states to regulate insurance companies for political points, which you’re seeing in California and Florida. However, insurance markets collapse slowly and then very very quickly when the math stops working out.

IIRC, it’s broke because only a small handful of properties account for a disproportionate amount of the claims.

Isn't the essence of pooled-risk insurance that a vast minority of policies will represent a disproportionate number of the claims in any given time period?

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#116

Post by kube-system »

huthuthike wrote: post #109
elteto wrote: post #78

Earlier quoted context omitted.

There already is a federal program for uninsurable properties (for flooding only, I believe). They take whatever insurers reject. By my understanding, people just keep building on the same spot, even if it floods constantly, therefore they are a huge drain on the program. I don’t see a solution honestly. With global warming large parts of the world will become uninsurable. And we shouldn’t expect insurance companies/…

A lot of these people are stuck in the situation. While they can get flood insurance to rebuild the property, they can't afford to abandon the property, and they can't find anyone to sell it to. So they are in a cycle of rebuilding the property, waiting for a flood, then rebuilding it again. There is a pretty obvious solution in my mind: The federal government offers homeowners a buyout for them to move out of that p…

How would you handle sales of the property? Some of these are desirable beachfront properties.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#117

Post by JSeymourATL »

tfandango wrote: post #85
Analemma_ wrote: post #77

Earlier quoted context omitted.

Floridians who want me to shoulder the bill for insuring their beachfront property against hurricane damage can go to hell. Pay for the insurance yourself or move to a place where disasters aren’t common.

I live in Oklahoma. Contrary to popular belief, getting your house destroyed by a tornado is unlikely. But hailstorms are on the rise and roof replacements are becoming more frequent because of them. Insurance has gone up A LOT for everyone, regardless of insurer, and for me despite installing hail resistant shingles last time. I am wondering what happens when people here can no longer afford insurance even though th…

Upvote for HNers in Oklahoma!

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#118

Post by pseg134 »

uoaei wrote: post #101
Analemma_ wrote: post #92

Earlier quoted context omitted.

> it's that the system that made mandatory the concept of insurance for a dignified, modern life You're talking like this is some kind of conspiracy theory, when there's not really any other way it could work. Banks will not give you a mortgage without home insurance, because then it would be an unsecured loan against an asset which would be worthless, with them eating the loss, if the house was destroyed. That's not…

Assuming the structure of the current economic system follows some kind of inevitable (natural?) law is part of why you are unable to reason beyond the logic of the markets we contend with today. Markets have taken many different forms, have been entrusted with different sets of responsibilities to different degrees, over the course of economic history. Perhaps it makes more sense now to develop a fiscal institution…

Well since your are the one proposing changes, what makes you think that a “fiscal institution” (whatever that is) would be more effective than the current market based solution. Don’t mention your feelings for extra credit.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#119

Post by sokoloff »

hypeit wrote: post #112
selectodude wrote: post #90

Earlier quoted context omitted.

The insurance mandates are for things that impact either your life or other people. I don’t want your judgement proof ass hitting me with your car without the ability to fix it, nor do I want you using emergency medicine as a pediatrician. Thus, mandates.

The problem is when you combine "mandated" with "for profit". The two should never go together. If it's mandated, I want exactly zero of my dollars going toward executive compensation, dividends, stock buybacks, advertising, sales... You're currently paying for that neat little 3d animated gecko under threat of US law.

In 32 of the 50 states, you can post a surety bond instead of buying the otherwise state-mandated auto insurance.

That list includes my state. I buy auto insurance because it's more convenient (and cost-effective) than going through the bond posting process, arranging my own claims-handling and legal representation in the event of a loss, etc.

I pay $1220/yr for insurance for two cars and two drivers (and for coverage well above the state minimums and excellent customer and claims service). IMO, it would be crazy for me to turn down that deal.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#120

Post by tfandango »

bushbaba wrote: post #103
tfandango wrote: post #85

Earlier quoted context omitted.

I live in Oklahoma. Contrary to popular belief, getting your house destroyed by a tornado is unlikely. But hailstorms are on the rise and roof replacements are becoming more frequent because of them. Insurance has gone up A LOT for everyone, regardless of insurer, and for me despite installing hail resistant shingles last time. I am wondering what happens when people here can no longer afford insurance even though th…

one solution is to exclude hail damage to roofs from basic home insurance policy. Similar to how earthquake and flooding is a separate policy.

It would likely be required by mortgage companies because a new roof is 20-30k on the low end. Otherwise the risk of losing their investment is quite high.
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