Money in the bank

Kind of interesting...

According to several recent studies, we would rather make $100k if our neighbors also make $100k, than we would $200k if our neighbors make $300k.

Huh??....

I’d move to a $200k neighborly area and take the $200k if it seemed to be that much of a problem!

National and regional independent agent P&C carriers wrote $800M less premium in 2007 (year 2008, don’t know) versus $5B and $4B increases in 2006/2005.

You’d think that as a result 2008 search positions would have been correspondingly fewer than the previous 3 years, but I didn’t notice it until probably 10/08.

It’s probably 40% quieter so far this year, but the first quarter has tended to be that way for the past 6 years or so.

Hope it’s just a first quarter trend!

Harvey Dorland

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%.