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If you want to jump into insurance why don't you look to by a nice independent book so you're not tied down to one company?
You can have a he11 of a lot of success being an agency owner without all the risk of starting an actual company.
Looking to Start P&C Company
- Thread starter rockstar42
- Start date
If you want to jump into insurance why don't you look to by a nice independent book so you're not tied down to one company?
You can have a he11 of a lot of success being an agency owner without all the risk of starting an actual company.
- Thread starter
- #12
rockstar42
New Member
- 4
That is good advice. I very much appreciate it.
G
Guest
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With virtually ALL insurance companies operating in the red these days, go ahead, start up a new company and see how long it lasts.....
I hears State Farm is running at 107% loss ratio right now, OUCH.
I hears State Farm is running at 107% loss ratio right now, OUCH.
If you start up a new carrier, the amount of business you can write will be directly proportional to the amount of reserves you can put up. The DOI (pick your state) will require HUGE capital reserves to ensure you can pay whatever claims come your way. To an insurance carrier, these reserves are frequently where the money is to be made via investing them appropriately.
Think of it this way, if you insure homes (or autos or whatever) and a tornadoe, hurricane, wildfire (pick your local disaster) wipes out a large portion of an area where you have significant exposure, can you cover the loss?
What if it happens in 2 areas at the same time, or a few months apart? Ask Allstate about Katrina......
Yes, you can buy reinsurance to help cover large losses.
Hang on, why do you want to get into writing your own policies? Seems like a lot of hassle. If you really want to know (ballpark wise) how much you need in reserve, pull an annual report on a carrier about the size you want to be and see how much they have in reserve and see if they can still write new business. It will give you an idea.... And yes, it probably starts at $10's of Millions if you are thinking P&C. It gets in the Billions for any decent size carrier.
Dan
Think of it this way, if you insure homes (or autos or whatever) and a tornadoe, hurricane, wildfire (pick your local disaster) wipes out a large portion of an area where you have significant exposure, can you cover the loss?
What if it happens in 2 areas at the same time, or a few months apart? Ask Allstate about Katrina......
Yes, you can buy reinsurance to help cover large losses.
Hang on, why do you want to get into writing your own policies? Seems like a lot of hassle. If you really want to know (ballpark wise) how much you need in reserve, pull an annual report on a carrier about the size you want to be and see how much they have in reserve and see if they can still write new business. It will give you an idea.... And yes, it probably starts at $10's of Millions if you are thinking P&C. It gets in the Billions for any decent size carrier.
Dan
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So you hate FINRA and your B/D? Do you think the DOI and your reinsurer are going to be any nicer to you?
As a new company, you will live and die based on the audits by your reinsurer, and that goes for any line of insurance, not just P&C.
As a new company, you will live and die based on the audits by your reinsurer, and that goes for any line of insurance, not just P&C.
Not to sound rude but this made me laugh. Anyone looking to start up an insurance company in Missouri has got to be crazy. You would most likely be looking at a loss ratio every year. Everyone thinks insurance companies are rich, not true. The huge problem I could see would be finding a reinsurance company that wants to take a new company in Missouri. Not likely..
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I have forgot the name, but years ago a health insurance company sprung up, operated for about 2 years then went under. Then they got a bit more capital, started up again, lasted for about 3 more years and went BK.
All I remember is they were one of AHU's "fantastic" carriers and when they went under the second time, they took a lot of agent commissions with them.
All I remember is they were one of AHU's "fantastic" carriers and when they went under the second time, they took a lot of agent commissions with them.
- 1,076
It can be done but it is best with lines of business that are low frequency... Like umbrella and DIC.
Woke up this morning and decided I would start a new insurance company.. Of course, I have no experience or knowledge of DOI requirements, reserves, loss ratios, investment strategies, underwritting, etc. But, hey! It seems to be a good idea to me! 
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With the questions you are asking, it does not appear that you have any insurance experience. The bottom in is, starting an insurance carrier won't happen, especially if you are on this form asking this question. Now if you were considering starting an insurance agency, that is another story.
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