National Underwriter - November 7, 2011

Overutilization of Specialty Medical
Practices in Florida vs. Other No-Fault States

FLORIDA Other NF States

Percent of NF Claimants
3.3%
Alternative
Providers
Orthopedists

Note: In the other no-fault states (HI, KS, KY, MA, MN, ND, PA and UT), no-fault claim costs have been in line with medical inflation

Source: Property Casualty Insurers Association of America Pain

Clinics
Chiropractors

E A REPORT BY THE Property Casualty Insurers Association of America (PCI) on Florida’s no-fault auto insurance says the problem of false claims from staged accidents is worsening in the Sunshine State. Quoting statistics from the National Insurance Crime Bureau, PCI’s report says Florida led the U.S. in staged motor-vehicle accident “questionable claims” between 2007 and 2009. The report adds that four out of the 10 U.S. cities with the highest rate of questionable auto claims are in Florida: Tampa, Miami, Orlando and Hialeah.

Florida Hurricane Catastrophe Fund

Bonding Capacity Over Next 12 Months (in billions)

$10-$11
$5
$6-8
$8-$10
$8

$18.4

Citi Goldman Sachs JP Morgan Barclays

Average

2011 FHCF Obligations

Source: Raymond James

E ACCORDING TO A REPORT issued by independent financial advisor Raymond James, the Florida Hurricane Catastrophe Fund (FHCF) will not be able to raise enough money in the capital markets via post-event bonds to cover all of its claims-paying obligations. The FHCF has nearly $18.4B in obligations after a storm. Four financial-services firms (see above) were asked to estimate the FHCF’s bonding capacity over the next 12 months, and they came in with an average of $8B, leaving a $3.2B deficit (when taking into account its year-end cash balance of $7.17B).

J.D. Power and Associates 2011
U.S. Auto Claims Satisfaction Study

Customer Satisfaction Index Ranking BASED ON A 1,000-POINT SCALE

Company

Auto-Owners Insurance 890

State Farm 878

Amica Mutual 865

American Family 862

The Hartford 858

Country 853

Erie Insurance 851

Travelers 848

Industry Average 846

Nationwide 841

Geico 840 California State Automobile Association (CSAA)

839

Safeco 838

Progressive 836

The Hanover 835

Allstate 834

Liberty Mutual 830

Mercury 825 Automobile Club of Southern California (ACSC)

824

MetLife 824

Automobile Club Group 821

Farmers 804

Esurance 800

Encompass 789

Commerce 772

21st Century 771

USAA 889

New Jersey Manufacturers Insurance* (NJM)

885

Scoring Legend

     Among the best

     Better than most

     About average

     The rest

JDPower.com

Power Circle RatingsTM

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*USAA open only to U.S. military personnel and their families. NJM open only to New Jersey Business and Industry Association members, New Jersey state employees and previously insured homeowners and drivers. Both are not included in the rankings. Source: J.D. Power 2011 Auto Claims Satisfaction Survey

E J.D. POWER AND ASSOCIATES, which tracks customer-satisfaction levels associated with auto physical-damage claims from first notice of loss to settlement, finds that total-loss claims conjure more customer malcontent when compared to repairable auto claims.