Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges • Hacker News Board

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

#141

Post by FredPret » Wed, Aug 30, 2023, 2:45 PM UTC

gorjusborg wrote: post #57

FredPret wrote: post #21

Earlier quoted context omitted.

It'd be great for investors if the top positions were paid mostly / entirely in stock. That way we can entice a good CEO with high pay and our interests will still align.

I'd also be great if we collectively admitted that one person (no matter who they are) can determine the success of a large organization of people. Today, we compensate them like they are doing the lion's share of the work.

"Work" is not measured in hours or effort put in. If it were, it'd be absurd for CEO's to get paid as much as they do.

Instead, "work" is measured exclusively by output. How much happier is the customer now that you've done your work? How much of that happiness translated into an actual transfer of resources from the customer to the company?

Seen through this lens, it's obvious that a couple of smart decisions at the top can easily outweigh years of grunt work by thousands of employees.

Now it's just a question of getting the best decision makers and leaders into the top positions so as to maximize overall value creation. But that's much, much easier said than done.

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

#142

Post by ejb999 » Wed, Aug 30, 2023, 2:46 PM UTC

jarym wrote: post #122

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.

This is such an American reply and one that as a European, I find mildly amusing. Where do you live that’s so safe and disasters are uncommon and aren’t on the increase? Everywhere will have different risk factors, the American attitude seems to be ‘I won’t pay for anyone else, even if it means I ultimately will have to pay more’.

There are some kind of risks everywhere, but denying the fact the some places are dramatically more risky kind of misses the point.

Where I live, hardly any disasters - tornado about every 100 years, last time there was huge wildfires was just after WWII, zero risk of flooding - biggest 'risk' I have is being snowed in for a few days as I dig out - there are plenty of places that have a much lower risk profile - and people like me, that pick where we live based in part on the risk, shouldn't have to pay extra insurance to cover people who willing choose to live in low-lying, flood prone areas.

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

#143

Post by harshitaneja » Wed, Aug 30, 2023, 2:46 PM UTC

sokoloff wrote: post #115

elteto wrote: post #100

Earlier quoted context omitted.

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?

Yes. But not from the same group of people over and over again. At least not in the laissez faire style systems where the market would stop assuming uniform risk and increase insurance rates to the expected values based on the probabilities of the specific circumstance. In a dirigiste economy, state would choose certain social factors to protect and keep the distribution of costs uniform for the betterment of the whole society. But even in those systems, I am not sure we should have beachfront properties or similar as factors. (Sorry about my lack of proper vocabulary and jargon in this comment, I seem to have forgotten all of my vocabulary relating to sociology and economics.)

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

#144

Post by alistairSH » Wed, Aug 30, 2023, 2:47 PM UTC

toddmorey wrote: post #134

mechagodzilla wrote: post #107

Earlier quoted context omitted.

It's more that those states are becoming the most expensive to maintain intact houses in , with the increased insurance a side effect of that. I know someone in TX that has needed a new roof like 6-7 times in 10 years because of hail damage - the insurance company has been bleeding money on their house for a decade, but that's because the house has actually been sustaining significant damage every single year. The on…

At that point, wouldn't a standing seam metal roof be the best investment? The cost is about 3x, but beats an annual roof replacement.

I've wondered the same about storm damage in Florida. There has to be a better option than shingles, even really high quality shingles.

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

#145

Post by tfandango » Wed, Aug 30, 2023, 2:47 PM UTC

toddmorey wrote: post #134

mechagodzilla wrote: post #107

Earlier quoted context omitted.

It's more that those states are becoming the most expensive to maintain intact houses in , with the increased insurance a side effect of that. I know someone in TX that has needed a new roof like 6-7 times in 10 years because of hail damage - the insurance company has been bleeding money on their house for a decade, but that's because the house has actually been sustaining significant damage every single year. The on…

At that point, wouldn't a standing seam metal roof be the best investment? The cost is about 3x, but beats an annual roof replacement.

Yes, in fact I have that as part of my roof, mostly for looks, I guess. It obviously doesn't ever leak, but it did get banged up pretty good and insurance ended up replacing it because of that. Personally, I could get used to just having a dented-up but sound metal roof for 50 years, and some people here do that. I'm not sure what the effect is on their insurance rates.

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

#146

Post by cjrp » Wed, Aug 30, 2023, 2:47 PM UTC

Tangurena2 wrote: post #128

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…

In the distant past, insurance companies used actuaries to price policies, so that the companies could make informed, rational decisions like "for people in this risk category, if we want to make X% profit, how much do we need to charge for that coverage?" Instead it became "insurance company M is charging $N for this type of policy, we have to charge something similar or else our customers would switch." Along comes…

True, although if you're the only one correctly pricing risk and your competitors are all cheaper then you'll be out of business anyway.

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

#147

Post by dghlsakjg » Wed, Aug 30, 2023, 2:49 PM UTC

jarym wrote: post #122

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.

This is such an American reply and one that as a European, I find mildly amusing. Where do you live that’s so safe and disasters are uncommon and aren’t on the increase? Everywhere will have different risk factors, the American attitude seems to be ‘I won’t pay for anyone else, even if it means I ultimately will have to pay more’.

Remind me again what part of Europe predictably and regularly receives 160 kmh winds at the same time as 3 meter floods? Are you allowed to build wooden houses along the beach there?

If you build your house in an area like that and fail to build any sort of protection for expected conditions, why in the world should your losses be subsidized by everyone else?

When the cost of insurance for your beach house is too high, that is a signal that you are at extreme risk, not a signal that you should pass a law to make the rest of the country pay for the portion of the risk that you can’t afford.

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

#148

Post by Tangurena2 » Wed, Aug 30, 2023, 2:49 PM UTC

pc86 wrote: post #129

huthuthike wrote: post #109

Earlier quoted context omitted.

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…

So rather than having insurance customers in other states subsidize Floridian homeowners so they can replace their property after damage, you'd rather have taxpayers in all states subsidize Floridian homeowners to buy out their homes? That's the same thing with extra steps, except now people who bought bad properties walk away with a nice bag of cash.

Eventually, we're going to have to abandon much of the vastly overpriced property along the seashore. Parts of Hollywood and Miami are already below sea level. We aren't willing to build the sort of dykes that one sees in Netherlands (homeowners will sue because it blocks their view of the sea), and we're too car-centric to let cities turn into Venice.

So we're going to buy those folks out anyway. This year, next year, 20 years from now. Eventually. It would be better to start now. New Orleans should have been abandoned already.

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

#149

Post by mechagodzilla » Wed, Aug 30, 2023, 2:50 PM UTC

toddmorey wrote: post #134

mechagodzilla wrote: post #107

Earlier quoted context omitted.

It's more that those states are becoming the most expensive to maintain intact houses in , with the increased insurance a side effect of that. I know someone in TX that has needed a new roof like 6-7 times in 10 years because of hail damage - the insurance company has been bleeding money on their house for a decade, but that's because the house has actually been sustaining significant damage every single year. The on…

At that point, wouldn't a standing seam metal roof be the best investment? The cost is about 3x, but beats an annual roof replacement.

That would be option 1 - I could easily see insurance companies saying that insuring a shingle roof costs 2-3x what insuring a metal roof costs, but then it's a question of who pays to replace an existing shingle roof with a much more expensive metal roof? The existing structure is insured for its replacement costs, not an expensive upgrade in the case it's damaged, but clearly current prices don't actually accurately reflect current risks.

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

#150

Post by Analemma_ » Wed, Aug 30, 2023, 2:51 PM UTC

jarym wrote: post #122

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.

This is such an American reply and one that as a European, I find mildly amusing. Where do you live that’s so safe and disasters are uncommon and aren’t on the increase? Everywhere will have different risk factors, the American attitude seems to be ‘I won’t pay for anyone else, even if it means I ultimately will have to pay more’.

The point is that "insurance at market prices" should be considered part of the all-in cost of the house, and that if you can't afford it, you shouldn't have that house. Surely even as a European you agree that if you can't pay $10 million for a house on the French Riviera, then you don't get to have a house on the French Riviera; once you conceptually include insurance into the total cost of the house, the exact same logic applies.