Psychology for sale

One casualty of the economic downturn has certainly been the confidence of consumers to make investments. Big ticket items ranging from new houses, home improvements, new cars, and even private school tuitions have all shown the impact of the decline in consumer sentiments. The problem, of course, is that consumers are afraid of making new commitments when they fear that they might lose their jobs.

Some companies, Kia Motors was first to the fore, have worked to offset that fear by offering assurances that payments will be suspended should a bread-winner in the family lose their job. Lloyd’s of London has taken this idea to a higher level and is offering insurance for banks, private schools, manufacturers and other entities hurt by this negative sentiment. In return for relatively modest premiums, companies can offer this unemployment insurance to its customers.

So, adversity breeds innovation. And perhaps consumer psychology can be bought for a relatively small price.

Update from London on the aviation market

Just back from a visit with our London insurers, we thought we’d provide you with a report on the state of the commercial aviation market and what to expect in 2010…

The calendar year 2009 has certainly not been a winner for aviation insurance underwriters, since they expect losses of approximately $2 billion USD and estimate the premiums generated will only total approximately $1.5 billion. The result has been an increase in renewal rates in the range of 20% to 30% for insured/airlines, or more in some cases.

What to watch for in Saturday’s health care Senate vote

Senator Reid has lined up a Senate vote for Saturday at 8:00 p.m. Republicans have backed off of a threat to require that the 2,000 page bill be read aloud before a vote to proceed with debate is allowed. This concession will allow the Senate to go home for Thanksgiving and has set a Saturday schedule of 12 hours of debate and an 8 p.m. vote, that if passed, will allow debate to begin in the weeks and months to come on the $900 billion Senate Bill Reid introduced this week.

Ask the Experts: Health care reform should focus on costs

For months I have worried that the battle over health reform would devolve into a partisan and political battle, pitting ideologies against one another, all the while losing sight of the larger goal. President Obama campaigned on a promise of reducing health care premiums by $2,500 for every family in America. That message appears lost in the bills working their way through Congress.

Why is health care so expensive in the US and will reform make a difference?

Sometimes a step back is required in order to evaluate the progress of the Health Care Reform debate. We are getting much, much closer to a bill passing the United States Congress to produce changes to our system of health care delivery that will impact almost everyone in the country. So, what are the challenges? Three big ones: getting access (insurance) for more persons; insurer practices, particularly in the individual market that punish individuals when they most need insurance; and reducing the overall cost of health care.