Comments for Cedarconsulting's Weblog http://cedarconsulting.wordpress.com Ibi est vox in sermo Sat, 22 Aug 2009 00:12:20 +0000 http://wordpress.com/ hourly 1 Comment on Timing is Everything by Swords http://cedarconsulting.wordpress.com/2008/06/13/timing-is-everything/#comment-39 Swords Sat, 22 Aug 2009 00:12:20 +0000 http://cedarconsulting.wordpress.com/?p=33#comment-39 great post, thanks for providing so much. Keep up the good posts.! www.hoover-f5914900.com great post, thanks for providing so much. Keep up the good posts.! http://www.hoover-f5914900.com

]]> Comment on Hello world! by Eric Ewing http://cedarconsulting.wordpress.com/2008/03/24/hello-world/#comment-2 Eric Ewing Tue, 25 Mar 2008 18:04:22 +0000 #comment-2 Dennis, thanks for developing the blog. I think that alternative risk financing methods are appropriate for a broader application than we currently see in the market. Captives, and their cousins, consistently used by large corporations since the 1960's have come to the attention of the middle market. The middle market is slowly awakening to the the possibility that standard insurance arrangements may not be priced according to any rational model related to risk and financial performance of their own account. Rather the more the middle market experiences the whipsaw of repeated market cycles the more they are likely to "explore." As the middle market continues to experience the much less rational model of the broader commercial marketplace fraught with exposure to far-flung cat losses, the fancy of legislators, investment market performance and the arbitrary and capricious whim of underwriters, the better the alternatives will appear. Imagine the manufacturer who must manage rising energy and commodity prices, labor and benefits costs and competition from overseas who must then also price the insurance market in the equation. Madness. Nearly totally uncorrelated changes in cost of risk may drive the unprepared business from the market. For accounts of sufficient premium size, good loss experience and management maturity, there is no substitute for taking the risk "in-house" through some alternative insurance vehicle. I look forward to reading the comments, and thanks for the "war story." RRRRbbbit! Dennis, thanks for developing the blog. I think that alternative risk financing methods are appropriate for a broader application than we currently see in the market. Captives, and their cousins, consistently used by large corporations since the 1960’s have come to the attention of the middle market.

The middle market is slowly awakening to the the possibility that standard insurance arrangements may not be priced according to any rational model related to risk and financial performance of their own account. Rather the more the middle market experiences the whipsaw of repeated market cycles the more they are likely to “explore.”

As the middle market continues to experience the much less rational model of the broader commercial marketplace fraught with exposure to far-flung cat losses, the fancy of legislators, investment market performance and the arbitrary and capricious whim of underwriters, the better the alternatives will appear.

Imagine the manufacturer who must manage rising energy and commodity prices, labor and benefits costs and competition from overseas who must then also price the insurance market in the equation. Madness. Nearly totally uncorrelated changes in cost of risk may drive the unprepared business from the market.

For accounts of sufficient premium size, good loss experience and management maturity, there is no substitute for taking the risk “in-house” through some alternative insurance vehicle. I look forward to reading the comments, and thanks for the “war story.” RRRRbbbit!

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