Comments on: Imerica Placed In Rehabilitation

By: Jay

Jay — Thu, 26 Nov 2009 06:26:07 +0000

Don,
When Imerica re-entered the market, it seemed as though it was too much of a rush, not much planning. It reminded me of other carriers that did the same thing in the past, like States General, Empire Fire and Marine, etc.
I don’t think it was much of an accident either. I don’t think they necessarily planned to fail. But I think carriers like this see a good opportunity to make some quick money and exit. You can see it in every stage of how they enter the market. From how they raise capital, to the sales structure, aggressive underwriting, policy design, and aggressive pricing.
It’s like seeing a dog try to run through a door with a stick that’s just too wide. Maybe it wasn’t so obvious the stick was too wide the first time, but the next dog you see try to run through that same door with the same stick… it doesn’t matter if it’s a different dog, it won’ work.
I’m curious about how many clients this keeps happening to though. Of the Imerica clients in Colorado, I wonder how many have previously been with carriers like States General or Empire Fire and Marine. Some people just can’t pass up a good deal, no matter what the risk.

By: Louise

Louise — Thu, 26 Nov 2009 01:58:00 +0000

Don,
Initially, it was just the low premiums that seemed like a red flag to us. But then when Imerica stopped selling policies the first time, that sealed the deal. When they returned to the market, we decided that the on-again off-again business practices just didn’t seem conducive to a trustworthy insurer-insured relationship, and didn’t recommend their policies to our clients.
I do not know how many policies they sold in Colorado or across the country, but I’m sure we’ll hear more about this situation as the rehabilitation process continues.

By: Don Levit

Don Levit — Wed, 25 Nov 2009 19:31:54 +0000

Louise:
I admire you for holding back from selling the too-good-to-be-true policies.
I am curious if you did any research on Imerica, in addition to scrutinizing the premiums.
Do you have any idea as to the number of policies they sold in Colorado?
Ceasing issung new policies should be an omen that premiums will escalate, as no new blood is entering the pool.
Do you have any information on premium increases in between the time they ceased issuing policies, and started again?
Don Levit