With companies failing and being downgraded, the financially strong companies will have it more their way in the business they are writing. At the same time, for the financially "clean" companies, there will be some interesting opportunities. The insurance industry uses a host of statistical measures that are all bound up in the phrase "actuarial profession." It's why the insurance industry has had such poor margins over the years; it's difficult to predict what the actual results are on a book of business that you write. The predictive and not always accurate business model is integral and is also one of the things that makes the insurance industry endemically unprofitable for a lot of companies. Pragmatically, from the insurance company's perspective, what the firm tries to do is to assess the risk that it's taking with any given client and charge a price that's got a little bit of margin in it for a profit. The client buys the product today, but the claims happen in the future, and even though you have historical experience to measure claims results, they're not always accurate. We set prices for a product that really will not be paid out for several years. It has always been the main issue for insurance companies. Insurance is one of the few products sold today where the actual justification for pricing happens two to fifteen years after the policy is purchased. That is how the financially strong companies will survive in the future, with the financially weak companies falling by the wayside or merging with the stronger companies.

Philadelphia Insurance is an A + carrier and can select the business that meets our underwriting criteria, charge adequate rates for this business and turn away the business that doesn't meet our risk profile.