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In our rear view mirror well.
Not so fast another hurricane season quickly approaching it.
We want to bring -- one of the largest insurance company's property casualty to find out how it's preparing to battle the storms -- McGee Hartford Financial Services.
Joining me in a Fox Business exclusive they're up what people look at test less than get hit by the hurricane that's what I -- I was listening -- -- review -- less.
Very carefully I've got to go try one they are that they're unbelievable put it but what you're looking at now because somebody.
Cars were hit.
So much property was damaged in sandy and now we have the new hurricane season coming we wanted to put it up on the screen because this is what.
That's likely to have to really face and the CEOs of the property casualty companies.
There's the eastern Pacific storm count and then there's the Atlantic storm pounds.
Eighteen storms coming from the Atlantic and nine of them are expected to turn it into hurricane force storms for major.
But -- -- you want but Knight what's up like four of the CEO of insurance company.
Well is it is one of the things that -- the reason we're in business is is to protect people.
To protect things from our most -- to them when it disaster tragically this -- It's -- in very interest in the last couple years we have not -- the kind of tropical storm activity that this pattern may indicate in one thing I've learned from being in this job allows.
Predictions of what's gonna happen -- not always accurate but but.
Even though we haven't had a lot of tropical storm activity we have had more wind and hail in the midwest so the last couple years even without tropical storm activity.
Have been among the highest cat years.
In our company's two and three year old currently we just can't forget the midwest -- at all.
And and I was listening to on sandy.
Sandy was a great reminder of power mother nature but also what for us it was interesting is because most acclaimed 60% of the dollars that we paid out we're not for home and -- They were for businesses small -- in particular a lot around business in eruption so a lot of learnings from there as well so what what are you doing now in preparation that you haven't talked about before.
Well I think the first thing we told investors this is that we've planned for even higher caps this year so our.
Our -- 350 million.
From sandy from some loan yes he formally address -- four we have added and I'm merely another percent which is a lot from this -- our side.
To our -- -- So we expect more catastrophes this year.
Primarily whatever the make up is is unknown to -- -- -- we we have we have presume that.
Weather is changing is becoming more severe the last two years have been that so we're we're planning expected to -- thing to take from sandy however.
Is that the industry is very well capitalized.
Got through sandy very nicely from a financial perspective and I have to tell you I'm really proud of our company and all the companies in the industry how -- -- -- -- well.
The fact is that that there are people yes but depending on what the company was.
Who complained it -- it didn't come quickly enough but the volume was so massive employment and your earlier point the complexity these things particularly around business and -- so it's a tough business now because you've got unbelievably low interest -- great atmosphere.
And I don't know if a lot of people understand this but what you do is when people pay.
Their premiums you take that money you invested in in low risk opportunities for us but them.
Interest in how they interest rates so low now you're not really gaining mad and so therefore you going to hike premiums -- kind of squeak to bring that margin a little bit.
Well I think for that that is an ongoing phenomena in home and -- is being sure that your margins are sufficient and it and home and auto it's largely a function of interest rates but also.
What kind of severity and frequency of lost your your your haven't.
In the commercial space setting candidly rates have -- in the last couple years -- you're seeing.
But we're we're we're largely a commercially oriented property casually business so yes we have in managing our business in this low interest rate environment.
And the fact that price is probably didn't keep keep track.
More for profitability than we are for -- we're willing to walk from business today in the interest of public -- improving in maintaining our margin well.
Look at the stock up 50%.
Year over years your shareholders are very happy -- the general question about insurance because I know everybody out there has had about experience and some.
Way -- another.
But the perception about insurance 'cause I'm not -- you because you do more more commercial but I -- State farm was my insurance and they.
They brought me like they usually like an eighteen -- I pay them for fourteen years all the premiums and when I needed them they -- weren't there yet so how do you fight that perception because they were saying oh what a good neighbor state departments there when I finally made about.
They so we're not there and I know I'm speaking for a lot of people.
And they've actually -- me which was weird and yes I'm angry -- part because the CEO would.
Would ever come on the show and talk to me about this but we applaud you for coming here and think how -- want people to see insurance companies.
Well I think that is of course -- I'll speak about my company in a in a moment that I think.
Financial services firms as a whole are fighting kind of -- perception issue.
We understand that some of it's unfair some of it is deserved and other things we can and should do better.
I think when it comes to property casually business.
I actually can't think of -- -- here -- occupation to be in because what we do as we protect the things that are most important people -- homes.
-- cars -- businesses many immigrants who started from nothing -- news small business we protect that.
Now there can always be disputes about how much is being charged should somebody be -- and I can't comment on your particular circumstances obviously.
But I think the business that -- -- it is is it is a remarkably reliable business we as an industry haven't done a good enough job telling that story.
-- you can say that probably of financial services in general but that's what we do.
We don't sell products insurance for -- we protect what's most liable to you well we should switch to you.
But her death touched Lila had an application right my back pocket what's the -- at UC San Diego graduate -- of these these public school system all the way to do you think you can I really isn't.
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