Sunday, December 03, 2006

Maybe Travelers' Insurance was right to limit their risk exposure by pulling out of the south Louisiana market. After all, they only netted $3.019 billion in net income from Jan. 2006 to Sept. 2006.

With all the storms last year, they were barely solvent, as 2005 brought in a mere $24.4 billion in revenue and left them with a paltry $113 billion in total assets.

Like they said on page 5 of their annual financial report, these disasters totally caught them off guard:
we believe it is the job of insurers to understand the changing weather cycles – which we have evaluated and assessed for years – and price risks accordingly.

Maybe I was being too hard on them in my previous post. At least they aren't retaliating against angry consumers for filing lawsuits based on this ludicrous notion that insurance companies are supposed to cover hurricane damage just because they paid increased premiums for living in hurricane prone areas. This is an honest industry after all, and there is no way they would engage in unethical behavior...
"we may incur loss and loss adjustment expenses as a result of disclosures by, and investigations of, companies for which we have written directors' and officers' insurance relating to possible accounting irregularities, corporate governance issues and stock option "backdating," "spring loading" and other stock option grant practices; the insurance industry, including us, is the subject of a number of investigations by state and federal authorities in the United States, and we cannot predict the outcome of these investigations or their impact on our business or financial results; our businesses are heavily regulated and changes in regulation may reduce our profitability and limit our growth;"

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