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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

#91

Post by lotsofpulp »

aurizon wrote: post #80
silvestrov wrote: post #33

Earlier quoted context omitted.

That leads to short term thinking and pumping of stocks, often done by firing R&D and maintenance people.

A major example of this was the decline of Intel (that they are trying to reverse) that was driven by an inane diversion of $$ by accountants who spent billions on 'share buybacks' instead of R&D = the inexorable fall from grace. I have never understood this buyback philosophy and spoke against it(my whispers in a hurricane). It was done to increase the share price - it failed, buckets with no bottoms are hard to fil…

> I have never understood this buyback philosophy and spoke against it(my whispers in a hurricane)

Buybacks come from net income (profit). A business always has a choice of using the profit to pay the business’s owners (via dividend or buybacks) or to invest it back into the business (such as spending on R&D).

Obviously, what portion of the profit is ideal to spend on R&D and what portion of the profit to pay to owners is not an objective truth.

And buybacks are nothing special, except that they allow more flexibility in how to reward the owners.

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

#92

Post by Analemma_ »

uoaei wrote: post #41
whalesalad wrote: post #29

Earlier 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…

This is an unhelpful and tone-deaf response. I don't think anyone is "surprised" that companies act in their own self-interest. If they are surprised by anything, it's that the system that made mandatory the concept of insurance for a dignified, modern life (what we name in shorthand as "the economy") continues to allow for rug-pulling of this magnitude which obviously results in net-negative outcomes for society as…

> 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 sinister: nobody wants to loan against an ephemeral asset. And car insurance is mandatory because if you hit somebody, causing a million dollars of lifetime medical bills, and you don't have insurance, you've just fucked their life over with no possible recourse.

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

#94

Post by ethbr1 »

nvahalik wrote: post #43
tallanvor wrote: post #22

Earlier quoted context omitted.

Some claims can certainly be automated. Not everything requires sending someone out. If, for example, there's a burglary, and a customer submits a list of items stolen and the value is within a certain range, it may be easier and cheaper overall for a company to cut a check rather than have someone spend time trying to verify the claim. There's a higher risk of fraud, but if the personnel savings outweigh it, then th…

For car insurance, this is already happening and is fairly reasonable. A lot of car claims are handled by desk folks because you take it to a repair shop and they figure it out and negotiate it. But P&C is a different beast. > and the value is within a certain range This is called a deductible. We literally had a guy who got denied on a claim end of last week because it didn't meet his deductible. (He provided the li…

I was under the impression that most insurance was moving to an efficiency:cost-optimized model.

I.e. Creating fraud scoring engines and auto paying claims they greenlight (usually incorporating history and total value as major signs). Essentially saying "there's not enough potential fraud value here for it to be cost effective for us to apply human review." Although someone submitting claims at an abnormal rate would be flagged.

But I'm more familiar with healthcare.

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

#96

Post by kdmccormick »

elteto wrote: post #78
Spooky23 wrote: post #46

Earlier quoted context omitted.

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.

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/…

I'm no free-market zealot, but in this case it seems like the market has spoken. They shouldn't live there!

Of course, there are ways to be humane about this, given that tearing people apart from their communities is bad for society. The government could taper off the program slowly, giving communities time to relocate. Or they could provide damage payouts with the stipulation that they are used to relocate somewhere else with lower risk, not rebuild in the same spot.

But to indefinitely subsidize building in doomed places? Doesn't seem right. I'm sure there's nuance I'm missing, happy to be enlightened.

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

#97

Post by ethbr1 »

pyrophane wrote: post #65

> The layoffs come after Farmers has pulled back from Florida and California in recent months. Implies that these two things could be related. Would make sense that reducing/stopping business in two very populous states could impact their workforce.

Should definitely be highlighted.

Property insurance is always in tension between actuarial statistics (estimates of ground risk) and politics (governments of various levels wanting insurance to be as cheap as possible).

I'd be fascinated to take a peek at whether actuarial models have changed in California and Florida (I can't imagine they haven't), and it might not make sense to sell property insurance there from a risk:marketPrice perspective.

On the other hand, I'd imagine the Fed boosting rates should have made the cash streams that insurance companies are more profitable?

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

#98

Post by uoaei »

whalesalad wrote: post #84
uoaei wrote: post #71

Earlier quoted context omitted.

What is your angle exactly? It's hard to understand the underpinnings of your perspective here. Systems do sometimes collapse, but I would prefer to look at it as "we are smart enough to study these systems and act in the social best interest when failure is imminent or has already happened, and responsible enough to work to improve the society that makes our lives possible."

The world is physically changing. Weather patterns are shifting. Hot is getting hotter. Wet is getting wetter. Wildfires are becoming larger, more prevalent and more destructive. Sea levels are rising. Ocean temperatures are rising. Parts of the world are becoming inhospitable for human life. We can try as we might to terraform and engineer against it but Mother Nature will win. At some point as an insurance company…

All the facts you state about the environment are true. But it makes zero sense IMO to make this an individual decision governed by the whims of the market and replicated anew across every single person. That is a purely reactive stance and, being humans, we can do better than that.

We are smart enough to be proactive about these sorts of things, and considering we already have such an apparatus called "the state" to use to our benefit, we can provide assistance to people to reinforce their homes or move when necessary (in a rote economic sense, to keep them net-positive productive, in the utilitarian sense; in a humanistically compassionate sense, to keep them dignified) instead of trying to guide systemic patterns of behavior by punishing individuals for making impossibly complex choices regarding where they chose to and already do live.

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

#99

Post by sokoloff »

lotsofpulp wrote: post #50
candiddevmike wrote: post #32

Earlier quoted context omitted.

RE: this is the future, what is the reasoning behind the sudden (post COVID it seems) squeezing of profit from everywhere? Seems like every business is pushing profit over employees or customers. Price gauging, layoffs, all of it without any reason besides "more profit". Why the sudden influx of greed?

Every business has always pushed profit. The only thing that changes is whether or not they have the negotiating power to get it. These are operating margins, not profit margin, but page 7 should still give an idea for which businesses have more pricing power than others. And of course, bigger companies getting bigger means businesses might simply be gaining negotiating power overall. https://www.yardeni.com/pub/sp50…

That page of chart drives me crazy from an information visualization point of view.

All of those charts could [and should] have the same Y axis scaling, including being anchored at 0% at the origin, and the information would be much more easily consumed at a glance.

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

#100

Post by elteto »

selectodude wrote: post #87
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/…

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.
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