Gregory A. Arms, chairman and CEO of the Global Employee Benefits Practice at Willis Group, is leaving for a competitor, Marsh, where he will establish a similar practice. (Here’s the announcement.) He had been at Willis since November 2005. (His biography is still on the Willis Web site.)

Were this news coming out a month ago, it wouldn’t matter nearly as much. But given that Willis and Hilb Rogal and Hobbs are merging, one could wonder if his departure from Willis foreshadows things to come as the combined Willis-HRH takes shape. Perhaps the move had been in the works for weeks or months. But one has to wonder if the recent acquisition of HRH accelerated matters or made the move better for Arms.

When you read through all the numbers that tell us in accounting terms that the property/casualty market is as soft as a half-gallon of ice cream sitting in a hot July sun, you find the bottom line is this: in many cases, particularly in the personal lines market, agents are feeling the pinch. And in some cases, such as the recent acquisition of HRH (Hilb Rogal & Hobbs) by Willis, it appears to be fueling mergers and might find some corporate folks out of work.

Worse, though, is the fact that this soft market is unlike many in recent memory due to several factors, but this time the factors are totally unpredictable. Read the rest of this entry »

Just in time for the dog days of summer comes a report from the Insurance Information Institute that one-third of all homeowners insurance claims are the result of dog bites. The liability claims cost about $356.2 million last year, up 10.5% from the prior year.

Doggone it!

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An article in the Baltimore Sun,  “Life, Death and Health Insurance,” chronicles the struggles of a 32-year-old Maryland woman who found a cancerous lump on her breast and has battled to obtain treatment because she has no health insurance. The article explains that several doctors wouldn’t treat her because of concerns about payment. The quest for treatment and a cure for cancer is a horribly difficult situation and not one I would wish for anyone.

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A recent study conducted by the American Association for Long Term Care Insurance (AALTCI) found that U.S. long term care insurers are about 10 times more likely to turn down applicants over age 80 than they are to turn down applicants under age 50.

Duh!!

The New Jersey Supreme Court has issued a ruling that may destroy all of the recent improvements in the New Jersey auto insurance market and ultimately lead to more fraud and higher auto policy rates.

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Martin Sullivan may be out of work, but he certainly is no poorer for his recent firing.

AIG, the international insurance giant once headed by Maurice R. “Hank” Greenberg, recently let go of its CEO of three years following two of the largest quarterly losses the company has ever experienced.

The insurer places blame for the losses on poor performance in the subprime mortgage market. And of course, with Sullivan at the helm of AIG, he gets the axe.

It is said that money can’t buy happiness; but in the case of Sullivan, it can at least buy some consolation. He will receive a severance package in the neighborhood of $35 million to $50 million for doing a substandard job.

That, plus the unemployment assistance that he might sign up for, and Sullivan might not come out too badly.

It just makes sense that Hilb Rogal & Hobbs (HRH) will close its Richmond, Va., headquarters and join its soon-to-be parent firm, Willis Holdings, at Willis’ swank new digs in New York City, pending approval of its recently announced acquisition by the London-based brokerage.

HRH has slightly more than 75 employees at its Richmond HQ (its local retail shop employs about 150), and Willis houses about 600 in the 200,000+ s.f. offices that it moved into about two years ago, which serves as the base for its U.S. operations. There will likely be much redundancy in the administrative, accounting, HR and marketing functions, so why would Willis continue with two HQ’s hundreds of miles apart, with one being far outside the Wall Street environs that Willis enjoys?

And while Willis might offer some HRH staff the option to move and work in New York City, some might speculate that not all will relish the move from a more genteel location to the hyper-speed pace of The Big Apple.

In some locations where Willis and HRH each have a presence, such as in Baltimore where the offices are literally across the street from each other, one could further speculate that those offices will also eventually share the same address; after all, by the end of the year they will share the same name, Willis HRH. Read the rest of this entry »

If Barack Obama were to choose Kansas Gov. Kathleen Sebelius as his running mate, it might be good for the insurance industry. She understands the various facets of insurance issues and she could offer a more balanced view on insurance regulatory reform than any other candidate, including and especially Hillary Clinton. Read the rest of this entry »

When it comes to quality health care, you get what you pay for. And in the case of health insurance, well, if you want high-quality health care, then you might have to pay more to get it.

The president of Aetna recently told Congress that the first step in lowering the cost of health insurance is lowering the cost of health care. Of course, there are many other considerations to lower health insurance premiums, but it seems that the buck always stops at the door of the health insurer. How about lowering the costs of the product that the insurance companies are insuring?

A Mercedes Benz costs a lot because it is made with quality products and great service: the engines are top notch, the ride is smooth, the leather seats are hand stitched, and the sound system is of the highest quality. If you use vinyl and plastic for the interior and molded synthetic products for the body, you will end up with a Toyota; for the money it is a very fine care, but certainly not a Mercedes.

Lower the costs of health care first, and allow people to choose the level of quality that they want in their health care.

But instituting a universal program where everyone gets the same thing — and managed by the government, no less — will result in lower quality and efficiency. In other words, Americans will no longer be able to drive Mercedes autos; we will be forced to take the bus.

Lindsay Lohan’s movie career can finally continue because an unnamed insurance company has agreed to underwrite her involvement in a romantic comedy, “Labor Pains.” Lohan, who at 21 has had her share, my share, your share and most of Asbury Park, N.J.’s share of alcohol and drug problems, is considered a bad girl. Insurance companies, believe it or not, don’t like bad girls, at least when it comes to underwriting risk. So they kept turning down the movie’s producer, Rich Schwartz, who, a source told the New York Daily News, “could only find one insurance company to cover her, and even then he really had to vouch for her.”

Lohan, still on probation for two DUI offenses, starred in “Freaky Friday” (2003), “Mean Girls” (2004) and “A Prarie Home Companion” and “Bobby” (2006) before detouring her career with alcohol and drugs. If all goes as planned, and there’s one insurance company with its fingers crossed, “Labor Pains” should be out in theaters next year.

Within hours of the news of the Willis Group’s planned acquisition of competitor Hilb Rogal & Hobbs for $2.1 billion, a number of agents attending the Professional Insurance Agents of New Jersey and New York Annual Conference in Atlantic City, N.J., began raising questions. Here are some that caught my ear:

• Was Willis aware of all of HRH’s agency acquisitions in recent years? Why would Willis “buy into the foolishness,” as one agent put it?
• What’s the benefit of Willis and HRH joining forces, when Aon Corp. will still be the biggest player in the game?
• What’s going to happen to me and when? Have you heard if they are cutting people? Was it in the announcement? Have you heard anything privately?
• Are any companies, even the big ones, safe from acquisition?

The answer to the first three questions remains to be seen, while the answer to the last one is clear. Further consolidation isn’t just likely, it all but mandatory, as insurance companies continue to seek new ways to cut costs and generate revenue. And no company, big or small, is immune.

Insurance like life can be ironic sometimes.

Liberty Mutual recently earned a $25,000 fine from Maryland Insurance Commissioner Ralph S. Tyler for failing to give proper notice of a proposed rate increase, according to an article at IFAwebnews.com. The property-casualty insurer had a computer problem that caused the problems.

The insurer isn’t alone. Its regulator in Maryland, the Maryland Insurance Administration, had some computer system problems of its own last year. For several days in February 2007, the MIA Web site wouldn’t allow producers to process their licenses, causing problems to agents seeking to apply for new or renewal licenses. The MIA fixed the problem, but didn’t incur any penalty, even though Maryland insurance agents were obviously inconvenienced.

As the insurance industry continues to increase its reliance on technology as a means to cut costs, computer problems are likely to occur - for insurance companies and regulators.

Democrat Hillary Clinton’s presidential bid appears to be finished, although in this crazy merry-go-round of a political season, it’s hard to tell. With her departure from the main stage, what happens to her plans for universal health? Are they dead?

Or will they return if and when she becomes vice president? Does she have the capital now that she was missing in the 1990s to make it all happen her way? Will Obama give her that plank on the platform in return for her support? Have Americans heard enough about health care during the last 18 months to make them believe it’s a real issue, or will ever-increasing gas prices and falling home prices claim all of their attention? The first signal should come at the Democrats’ convention this summer.

Or, will they return in a future campaign if she runs for president again?

My bet is that they’re coming back, sooner or later, just like Hillary.

Leave it to Massachusetts.

Not only are the uninsured being fined a monthly fee that later this year will be more than the monthly premium for health insurance, the state is looking to pay for increases in the cost of the state-run program by charging a buck-a-pack fee on cigarettes.

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