Money in the bank

Some interesting tidbits to consider...

· If you invest $20k in your 401k that earns 6.5%/year for 20 years, you’ll have $70,500 if the annual expenses are .5%; but you’ll only have $58,400 if annual expenses are 1.5%.

· Only about half of American workers have a retirement account.

· Only 66% of workers join their 401k, and only 10% contribute the max.

· The average 401k account balance of near retirees has fallen more than 20% (their accounts were too stock-heavy, considering their age – not conservative enough).

Money in the bank

Just read a list of the 10 best companies to work for.

Looks like only three of them are insurance related (AFLAC, Principal Financial, and American Fidelity).

What stands out when you look at the reasons for these 100 companies being on the list, is as diverse as the list itself.

Most did not make it because they are the top industry payers.

Instead... they were on the list due to things like regular communications to the employees, paid days off to do volunteer work, and on-site child care center with inexpensive rates, wellness programs, on-site fitness programs, etc.

I’ll bet that the employee turnover of these best companies is very-very low.

That’s probably why none of them are my clients! J

Harvey Dorland

Money in the bank

Here’s a hodge-podge of things I’ve noticed recently.

Bad news is that insurance carrier profits in the P&C area fell nearly 80% last year.

· Curious... as they predominantly blame it on investments, but the DOW only went down 38%.

· On the plus side, they still made $14 Billion.

Bad news is that insurance companies unemployment was 3.5% in January.

· Good news, I guess, is that national unemployment is double that figure.

Bad news is that employee referrals are responsible for 40% of the hires for most companies.

· That only leaves a 60% universe, then, for the recruiting industry!

Money in the Bank

Standard and Poors (the rating agency) says that it is maintaining a “negative outlook” for the Commercial P&C sector, due to the pricing cycle it has gone through the last 3 years (and the decline in investment income).

Thus... a number of rating downgrades are expected to occur.

I would think that the above should not be a surprise to anyone.

A number of primary carriers are still “buying” business at ridiculous prices, and continue to invade areas like the surplus lines marketplace where they do not belong.

So... if you’re thinking of changing jobs, don’t forget to check out the other carrier’s rating, and if you’re feeling good about where you are, you’d better check out your rating also!

Money in the bank

Some of the top Fortune 500 managers were recently asked what the best advice they’ve ever received has been. (The following are some excerpts)...

“The basic social responsibility of a business it to maintain employment and meet the obligations to pay taxes.”

“You’ve got to quickly learn the difference between managing and leading.”

“Squeeze costs, improve efficiency while delivering innovation.”

“People will still spend money on what they love, but they’re more choosy in a recession.”

“Listen and then make clear decisions.”

“The task of leaders is to simplify. You should be able to explain where you have to go in two minutes.”

These are all good thoughts for anyone in management regardless of the industry they are in.

Money in the Bank

It’s kind of interesting...

The number of employees in the insurance industry went up this past year for: P&C insured, Health insureds, Life insureds, TPA’s, Reinsurers.

The number went down for: Title insurers (not a surprise considering the real estate market), Agents & Brokers, Claims Adjusters.

The highest non-supervisory earnings were for P&C insurers, and the lowest (which catches me by surprise), was Reinsurers.

Wages were up in 7 of 8 industry groups an average of 3.5%.

Money in the bank

So... the “R” word is in all of the papers, but, as far as I can tell business is as usual (although more cautious) with our clients.

While being particularly concentrated in the commercial lines P&C side, I’ve not noticed a marked drop-off on the personal lines side, or the life and health side, either.

A Lloyd’s exec recently stated (10/08) that he sees our industry as being “recession—proof”.

I would add the caveat that according to many recent industry reports, some are ailing (I won’t name names)!

Life goes on... and if you hide your head in the sand, it can pass you by.

There are likely many great buys (some say the best ever) in the stock market.

I say that if you’re good at what you do, there are a number of great career opportunities out there for you as well.

Harvey Dorland