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Originally Posted by flstf
Maybe it's like Babe Ruth said when told he was asking for more money than the President of the United States makes, "I know, but I had a better year than Hoover". 
I don't think a comparison of insurance executive compensation with sports and celebrity superstars would be helpful in explaining how they can best compete with non-profits. |
I think the compensation issue gets raised as a "red herring". There are base salary amounts and benefits which get charged as a clear and understandable expense to operating earnings compared to equity compensation (stock options, grants, purchases at or below market prices, etc.) which could dilute shareholder's equity. The first creates a fair comparison to non-profits the second does not and it is not clear on how to expense those. Generally, I agree there are some problems with executives receiving equity based compensation but I think the problems are small when considering an executive with 30+ years with a company and when the company has equity based compensation for most if not all employees. In the case of companies like Microsoft even some secretaries retired as multi-millionaires.
---------- Post added at 08:52 PM ---------- Previous post was at 08:41 PM ----------
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Originally Posted by The_Jazz
www.markelcorp.com
The fact that you don't realize that IBNR is directly related to actual losses basically proves my point. It stands - again - for losses Incurred But Not Reported. They are losses that the company is ASSUMING are out there.
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Re-read what I wrote.
An insurance company does reserve for IBNR. IBNR is an expense item for them.
Here is a link to some simplified info on insurance accounting for those interested.
http://www.casact.org/library/studyn..._Final2007.pdf
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It's a plain old guess. It cannot, by any stretch of the imagination, be anything but a guess since it's, by definition, an unknown.
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Actuaries would not agree with you.
I don't know what more to say.
---------- Post added at 08:56 PM ---------- Previous post was at 08:52 PM ----------
Quote:
Originally Posted by dippin
profit is the wrong variable to focus on. Overhead expenses is the problem, and overhead expenditures are substantially higher in the current American system than in any other system in the world that we have data on.
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Gee, re-read what I wrote. The primary focus of looking at the 10K was on "overhead".