reinsurers have been burned horrifically-- even moreso than when I got out of the business 20 years ago while trying to get reasonable treaty conditions. We had to hold a lot more risk ourselves and couldn't live off of the float and overriding commissions any more.

Long gone are the days when you could just lay off risk and happily live with 110% loss ratios. All those classes about how to rate a risk started to mean something. And the policyholders howl-- not knowing how good they used to have it.

placed upon premiums. The fact that investment income is reduced has also resulted in a need to obtain additional premiums. Thus consumers enjoyed a double-bonus from the reinsurance and investment income markets for several decades, therefore underwriting standards were in effect somewhat lax and insurers could take a chance on obtaining new business and offering discounts to retain current policyholders.

I am concerned about the possible rate increases coming to property owners, but I also understand the necessity of insurers making a profit. After all, we want the insurance company to be there for us when it is necessary to file a claim. Considering the other administrative expenses of insurance companies, the loss ratio better be around 60-65 in order to get a combined ratio less than 100 which would make the insurer profitable.

I am not an actuary, but I am interested how the rate filings for State Farm measure both case reserves and IBNR (incurred but not reported) in their projections. While I did not specialize in homeowners insurance, my work in other property & casualty lines revealed consistent over-reserving particularly in the case of IBNR which I usually considered to be SWAG (a scientific wild-assed guess). My conclusions were based on analyzing incurred losses (paid + case reserves + IBNR) by policy year and comparing it to ultimate incurred loss paid after several years (sometimes over 20 years for long-tail lines of business). There is a some leeway in those calculations which could lead to rate increases that are excessive.

but I don't know anything about how they do it with rate filings.

In Ocean Marine, we had cargo claims coming in from warehouses in Pakistan and vessel liability claims coming in from everywhere else. IBNR from fire and auto polices, or even most commercial lines, sounds pretty simple compared to that.