Think about the last couple years…13 billion lost in 2022 and claims being terribly under staffed by thousands. How do you let either of these happen? These aren’t just slightly miscalculated mistakes these are massive massive massive errors by the highest payoff employees of the company who will still be given millions in bonuses this year.
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No bonehead. If a rate increase happens TODAY, then each policy gets the new rate on its next renewal date. Some policies wouldn’t even get billed at the renewal rate until Sept 9. And those premiums would not be fully earned until March 9 next year. Declaring a rate increase does NOT immediately put money in the bank.
@5gpn-you flunked insurance accounting. As each policy renews the premium increase is earned a day at a time until at the end of 6 months a 100% of the increase is earned. Your description is totally erroneous. Maybe stick to claims?
If a rate increase starts today, it will take 6 months before all the policies even get the increased renewal, and another 6 before those premiums are earned.
The people crying about the 2022 underwriting loss are no doubt the same people who were crying for huge dividends and pay raises in 2021, after the COVID induced profits of 2020.
Whoops- lot of mis-information in prior post. Progressive actually achieved a 1.5 Billion profit while SF was achieving the biblical loss of 13+ Billion. GEICO lost a more reasonable 1.5 billion in auto. Premium begins to be earned on day one and with a 6 month policy is fully earned in wait for it, 6 months. And you charge premiums based on future losses, not past losses. And loss cycles don’t just happen- 2 major causes- catastrophe weather beyond normal trends or failure to recognize frequency or severity. According to CEO, SF failed to inflation factors in their rates while other carriers did a much better job.
Loss cycles are going to happen. 1. Nobody knew how fast claims costs were going to increase. None of our competitors saw it, either. 2. Rate increases don’t change things right away. That money doesn’t come in immediately, and it doesn’t “count” until it’s “earned”…..meaning days paid for have actually passed. It takes approximately a year for that increased premium to hit the system…. even though the losses that caused the increase have already been incurred.
@3FW
Because the state tells us we have to buy your car after passing a cost threshold, regardless if its cheaper to just repair it.
Thats why sometimes you get paid 3x the claim cost to total a car. Ive worked the claims that do go back to repairs, and often they come back with lots more issues unseen at the initial inspection, so your guess that it was 2.5 times the claims cost wasnt accurate unless they fully tore the car down.
Claims isnt easy. Every ignorant customer thinks they know the job better than you do, and are clueless about what they are talking about. Half cant even comprehend that the state would dictate how their claims are handled, and cant understand why you cant just let it slide for them....ect ect ect.
Even within the company so many are 100% ignorant to what even our associates need to know to function even at an average level, and we pay them close to fast food and retail...two competing industries you can be brain dead and do the work.
This is why burning employees even at the low level is disasterous. You just chase the people who can away, and get to keep the id--ts who cant explain why they have to total your car properly.
Why not adopt the Hi-Road/BluOwl or whatever it's called and gradually scale it for all of SF? Or was that another failed venture?
@4coe, still the same smoke and mirrors fvckery just different department functions and vendors. And in five years the gig will be up, costs will be sky high, service levels down, and then IBM and Gartner will tell them to bring infrastructure and people back in-house. But by that time execs will have milked their bonuses and be long gone.
Not talking about HCL . The outsourcing planned but not yet announced.
@4mse, NOPE. The primary reason IT Operations and Infrastructure (and call centers) were outsourced is $$$. HCL is not a creative and innovative force and will not roll out new and super-improved apps, won't decouple legacy systems and migrate to newer platforms, etc. HCL is just an Indian body shop that will eventually offshore sys admin and call center functions.
The relationship with HCL will look like the Company is saving money and executives in several departments and at the enterprise level will pad their bonuses significantly because of their apparent success at expense management.
The primary reason ET/IT is being outsourced. They have been trying to modernize for 2 decades with little to nothing to show for it. They are in fact the drivers of workload in claims and underwriting.
Underwriting losses would be significantly less if they had proper staffing, not workforce management bare bones and lets just call it fully staffed, but actually staffed.
Claims is such a disaster, nearly across the board now. Everyone is new and poorly trained. Mistakes happen. Delays occur due to mistakes. Delays cost dearly in multiple ways.
Underwriting is plagued with archaic software that makes claims software look cutting edge. Policies are not getting updated in a reasonable time due to long work queues. Staff is poorly trained at agencies, and they have to know a LOT of archaic software, multiple systems to do one job. Its a nightmare across the board. When you hear it can take a month to get a change on a policy its unbelievable. Underwriting wastes so much time dealing with the DOS style systems and issues that arise attempting to modernize it.
Technology almost across the board is a nightmare to deal with, causing lots of rework, multiple entries of the same data across multiple systems that waste time. We tried to modernize on the cheap, with half of it horrificly designed in house tech and outsourced functional tech.
We have lots and lots of policies, not enough making sure we are charging properly and keeping good business. We dont have nearly enough people to serve our customer in a time of need. We dont have enough knowledgeable employees on the front line, and why would you want to stay there where you are actually needed.
Its a mess. A huge mess that someone will need to clean up, while the creators of the mess get to swim in their vaults of cash at home.
But at least we have enough policies to brag we are still #1, despite we only seem to follow these days.
My car was recently totalled. The first 2 "claims" folks were ignorant. But happily I was paid 2.5 times the value for my car so their incompetence worked in my favor there but how can I company last if it's paying 2.5 times the value the claim?
You laid off the knowledgeable, experienced, loyal lifelong workforce...who you gonna blame for that? Tipstard has to go for gross negligence, poor leadership, and greed.
Longtime agent, one time underwriter here. There is no switch we can flip to make an accident “not at fault”. It shows up the way it shows up. If somebody’s claims department coded it incorrectly, that’s not on the agent.
Who will SF layoff? I thought every department was struggling with adequate staffing.
Sf replaced all the key underwriting leadership with agency people.
SF was/is writing HO in wildfire areas when no other carrier would at way below market rates. SF writing CAU at 50 cents on the dollar. NY, NJ auto/home rates are still way below market price. Agents are allowed to change an "at fault" accident to a not at fault accident to get an even lower rate, at the touch of a button. Lots of problems and this ship can't turn on a dime....it's too big.
@1cpy+1lt7dbms
sure thing, since its your idea your department can be first, do let us know how it goes clown.
To fix this
Eliminate the pension
Outsource
Layoffs
Easy
Layoffs anyone?
Its a perfect scenario with sf being a mutual company and supposively owned by the policyholders. The policy holders will never unite and get rid of the ceo…..he is the main problem….he is clueless in running the company……other leadership are in his pocket.