Insurance industry out of control

[pms]

Is there a Left source for following what's going on in the insurance
industry?  If you follow the Buffet,s
eems like this is where Capital intends to make out-sized profits during
this period of profit squeeze.  In fact Buffet shows up in every investment
theme I've been interested in in the last coupla years.  He bought a lot of
silver.  He bought H&R Block, which, with their purchase of Olde, looked to
me to become the financial planning alternative for the masses.  Of course
he's big into insurance.  And now he's buying up those cheap(if you weren't
a shareholder) telecom assets.

Insurance crisis could shut children's homes

Mary O'Hara
Saturday July 13, 2002
The Guardian

The government may be forced to step in and save hundreds of children's care
homes from closure after withdrawal of liability cover by insurers.
Th

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e national care standards commission, the body responsible for inspecting
and registering private and public children's care homes, said it has been
contacted by several facing closure.

The homes claim they are either unable to obtain cover or that premiums have
risen by as much as 700%. Without public liability insurance, care homes
cannot legally remain open.

They are also facing increases to cover employer's liability because of a
rise in claims made by staff for injuries caused at work.

The crisis was highlighted this week by Post magazine, which reported that
some care homes had seen their insurance premiums increase seven-fold.

The National Association of Independent Resources for Children, which
represents more than 200 private care homes in England, Scotland and Wales,
said the situation was reaching crisis point and it intended to take the
matter to the government.

The association has scheduled an emergency meeting on the issue for next
Tuesday after it was contacted by worried members.

Nairc member Tom Starkey said: "Insurers see children's homes as too big a
risk. I'm not sure if it's because the number of abuse claims are pushing up
premiums or if it is a matter of perception and all the bad press about
abuse recently is making us look like a bad risk."

While happy to continue covering other types of care homes - such as those
for the elderly - which tend to attract fewer claims, insurers have been
abandoning the market for children's care cover.

The collapse last year of Independent Insurance, which offered competitive
rates for high risk clients such as care homes, left a hole in the market.
Other insurers were reluctant to move in. Norwich Union closed its doors to
new business some time ago. Others such as Ecclesiastical announced in March
they could not afford to take on new customers.

Those insurers remaining in the market, such as Lloyd's syndicate Trenwick,
are either refusing to renew or charging hefty increases, according to
brokers working on behalf of care homes.

Axa, another big insurer, says it is taking a cautious "case by case"
approach.