Earlier quoted context omitted.
> 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.
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Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
171–180 of 241 posts
Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
#172Earlier quoted context omitted.
I'll assume you are arguing in good faith, but I doubt it, considering your tone. I did not say anything about a leaderless company. I said that the current perceived value of C-suite contributor is way over-inflated. That culture can and should change.
Ok, let's look at how a bad CEO can affect a company. When Zuckerberg decided to pursue the Metaverse, he took Meta's market cap from $1.1T in September '21 to $244B in October '22. 1 year, $850 billion in value destroyed. So, it should be clear now that one person can have a lot of power over the business. How much should they be compensated when they wield that much power? I'm guessing you think it's less than $1M…
I don't have a number in mind, my feeling is directional.
I also don't think compensation is the only/best tool to prevent or punish bad decsion making. There have been cases where developer/dba have put companies out of business with a poor decisions. We don't pay them millions of dollars to 'get the best' we put processes in place to prevent issues like that. Otherwise, I'd suggest doing the same thing to the bad CEO that you'd do to other employees: fire them. That's why you have a board.
Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
#173Earlier quoted context omitted.
Why are people surprised when a company operates in its’ own best interest? Why should we expect anything else? Insurance companies are just about moving dollars around and hedging risk. Being perturbed about this is like being mad about your dog barking at the mailman. If someone said I’m going to start free climbing the tallest buildings in the world - but I need insurance - the company will tell you to get lost be…
It would be appropriate to do something about your dog barking at the mailman, like hire a professional and learn how to teach him not to do that.
People often forget that many dog breeds were bred for work - like alerting and defense.
If you have a 3 year old child crying in a restaurant, can you get mad at it? No. You can pat it on the back and take it outside to respect the space and other patrons, but you can’t get mad at a child for crying. Same analogy. Don’t get mad at nature doing nature things.
Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
#174I'm sitting here relaxing after a long night of hearing my home getting pounded. Rough night. If I were an insurance CEO, I would run away from Florida.
Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
#175Earlier quoted context omitted.
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 who…
Which ends up being the issue with any insurance programs for the uninsurable. 100 percent of the time, it will end up being a subsidy to the policy holder. If it weren’t, they’d be insurable.
Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
#176Earlier 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.
The mandate is for driving a vehicle on public roads, which is absolutely not a right. You can decline paying for-profit companies for insurance by not driving.
The healthcare argument is different and reasonable. The lack of a taxpayer-funded health scheme in the United States combined with making it illegal to opt out of being alive (and requiring health insurance) is nonsense.
Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
#177Earlier quoted context omitted.
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 accuratel…
Should be "easy" for the insurer to say "you get one more shingle replacement, then we dump you." At that point, the customer either buys a metal roof or moves. Market functioning correctly, no?
Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
#178Earlier quoted context omitted.
Stay in the market because the competitor will be put out of business once their customers actually start filing claims. Then customers come back to you.
This only works if you can stay profitable enough long enough for it to start to happen. The fewer customers you have, the riskier your pool, and the higher your prices have to be. Suddenly $100 becomes $125 becomes $150 for the same or less profit. It's safer to just get out of the market entirely. You can always go back in but if you stay in too long it could wipe you out entirely.
If all your customers are flocking to the undercharging competitor, you're out of the market anyway and your costs are effectively zero since you don't have anyone filing claims. There's no practical scenario where the competitor, which is losing money on each customer in aggregate, lasts longer than a company with no customers.
Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
#179Earlier quoted context omitted.
Why are people surprised when a company operates in its’ own best interest? Why should we expect anything else? Insurance companies are just about moving dollars around and hedging risk. Being perturbed about this is like being mad about your dog barking at the mailman. If someone said I’m going to start free climbing the tallest buildings in the world - but I need insurance - the company will tell you to get lost be…
Re: FL & CA becoming uninsurable-- I have almost zero knowledge in that area. I assume it's because of natural disasters such as Fires, Hurricanes, and sea level rise?
I think there's a price of work element too. In my mother's area, insurance is cheaper because a plumbing job will cost 60€/hour (+ 30€ for the intervention). I'm pretty sure the costs are more like 120/150 in my area.
Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges
#180Earlier quoted context omitted.
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 accuratel…
Should be "easy" for the insurer to say "you get one more shingle replacement, then we dump you." At that point, the customer either buys a metal roof or moves. Market functioning correctly, no?
This is one thing I've never really understood about the market for insurance. Wouldn't the customer's best answer be, "OK, thanks for the new roof, I understand that you're dropping me, so I'll just switch to your competitor"?
And then wouldn't it be in the interest of the insurers to maintain a shared list of "bad" (unprofitable) customers and freeze them out? Which is already a bit of what credit scores are for?