New Workers Comp Hard Markets May Come From China
The Workers Comp hard markets of old have almost a fairytale connotation. Many insurance workers and press may have only seen soft markets. Workers comp hard markets still exists today. It is sectional or just hardening for certain markets.
The trucking and temporary personnel agency markets are but two that have felt the searing pain of no carrier willing to write in those marketplaces. Carriers are risk-averse most of the time as there is limited profit in WC insurance.
China’s financial market turmoils have been the subject of more than one article written by me. Following the prior link to the article written last year will explain it more fully.
Earlier this week a financial red light started flashing for the China economy. A banking crisis in China would have far reaching effects and would affect the insurance markets. One reason for this effect is the amount of investment China has made in the American financial markets including insurance.
Has anyone heard of the Bank for International Settlements (BIS)? According to the linked article, they are the number one worldwide financial watchdog.
The BIS posted to its quarterly report that China’s credit to GDP gap had:
- Reached 30.1- the highest to date
- In a different league altogether from any other major country tracked by the institution
- Significantly higher than the scores in East Asia’s speculative boom in 1997 or in;
- The US subprime bubble before the Lehman crisis.
The comparison to the subprime bubble should raise more than a few eyebrows. Hold onto to your office chairs, it may be a bumpy ride.
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