No. of Recommendations: 3
given any insurance experts are likely on BH board, am wondering which specific companies the kinsale ceo refers to in this interview :
"...They're destroying their own capital. And if you doubt me, pull the Schedule P exhibit for a few of the larger fronting companies and look at their gross loss ratios. Most of them, they're booking the current year at a 60. But if you look back four, five, six, seven, eight years, they're in the 90s.
Well, if you're running a 90 with a 40% expense ratio, that's 130 combined. You think you're going to make that up with [float] investments? No way. But the fronting company seeds most of that risk off to someone else, a reinsurer of some sort. And so there's a lag. Does the risk bearer understand what's happening to his capital?..."
