Who’s leading in Commercial Auto? Workers’ Comp? Cybersecurity?

In the graphic below, click on the top bar showing the first market in the list (

National Underwriter’s Top 100 and Heads of the Lines lists — the data for which is provided by S&P Global Market Intelligence — today offer a look at which P&C groups are premium leaders in 11 key lines: Private Auto, Commercial Auto, Commercial Multiperil; Inland Marine; Workers’ Compensation; Product Liability; Fire; Ocean Marine; Surety; D&O; and stand-alone Cybersecurity.

The rankings in nine of these individual lines (Commercial Auto, Inland Marine, Fire, etc.) reflect net premiums written (in $000s), with the exception of D&O stand-alone Cybersecurity — which are ranked by direct premiums written due to the fact that NAIC statements do not disclose net premiums written for those lines.

In the graphic below, click on the top bar showing the first market in the list (“Private Auto”) to view results in the other 10 lines.

In perusing these individual product lines, what some might find striking is the amount of net premiums being garnered by two key players in writing stand-alone Cybersecurity: AIG and XL Group. In last year’s rankings, AIG hadn’t cracked the top five; this time, it leads the pack.

If every picture tells a story, as Rod Stewart once sang, can numbers likewise tell a tale?

This week, we’ll continue our comprehensive look at 2016’s top performers in P&C with a look at the best (and worst) in industry combined ratios. Readers can also check out our previous reports on the Top 100 P&C groups and Top 100 P&C Carriers, both ranked by net premiums written; you will note that the lists are searchable, allowing readers to easily find a specific group’s or company’s performance.

The entire Top 100 package is also featured in NU‘s July print edition.

The S&P Global Market Intelligence data featured here is derived from all U.S. companies that file with the National Association of Insurance Commissioners (NAIC).


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Universal Life Sales up 64%

Policies with secondary guarantees accounted for 64% of UL sales

(Photo: Thinkstock)

Universal life insurance policies with long-term care riders may have accounted for 24% of premiums from new U.S. UL sales in 2016, according to analysts at Milliman

The percentage of UL sales premiums going to policies that offer long-term care benefits increased from 22.3% in 2015, and from 16.4% in 2013.

In the market for UL policies with secondary guarantees, the share of premiums going to policies with long-term care riders increased to 33.5% in 2016. That’s up from 31.9% in 2015, and up from 24% in 2013.



Transamerica was the leader in the indexed UL market. Prudential was at the top of the fixed UL market.

Carl Friedrich and Susan Saip have published those figures in Milliman’s latest UL market survey report.

Milliman began the survey in October 2016 and received 32 responses.

The figures for 2016 were for the first three quarters of 2016.

The participating insurers generated $1 billion in UL sales in 2015, up from $924 million in sales in 2015.

Sales for the first three quarters of 2016 amounted to $735 million.

Sales of universal life policies with secondary guarantees accounted for 64% of UL sales in the first three quarters of 2016, up from 62% in 2015.

A universal life policy is a flexible-premium, flexible-benefit life policy designed in such a way that interest earnings on premium payments can increase the cash value of the policy.

A UL policy with a secondary guarantee is a UL policy with a feature that can keep the policy from lapsing, even if the cash value falls to zero, once the holder has made a minimum number of premium payments.

A spokesperson from Robert J Russell Companies said that they sell 100% term insurance the first year then typically about 79% of those term policyholders will convert to a UL the second year.

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Does Homeowners Insurance Cover Solar Panels?

Anyone financing a home purchase knows that the bank wants to see adequate insurance on its collateral. Of course, what is sufficient for a lender may not be sufficient for the owner. Myriad homeowners policies contain a sea of coverage and exemptions which are sometimes difficult for policyholders to comprehend. If an improvement is made to the structure or a major fixture is installed, there may be some question as to whether the standard hazard policy will apply to damage in those areas. Owners should take caution and not assume that their current policies are satisfactory. Those with solar panels, however, can take some comfort in the knowledge that many programs include these energy-saving devices.


Solar Panels Are a Major Investment

There is a reason that solar panel producers say that these cost-saving measures will pay for themselves. The fact is that upfront costs are substantial. According to Forbes, the primary material used to create panels is silicon, the same substance used to make computer chips. Although a ubiquitous element in the earth’s crust, silicon is not readily usable in its raw form, and thus must be extensively refined. Reuk states, that silicon disks—or wafers—are most often infused (professionals use the term “doped”), coated by a phosphorous covering and then organized into cells. The cells, in turn, are mounted on a photovoltaic panel and backed by metal strips to conduct the heat from the sun.

With materials and manufacturing requiring so much financial input, it is little surprise that solar panels cost what they do. Realtor.com estimates that the standard 5-kilowatt solar package runs about $18,500. Not only is this a large portion of household assets to part with, it is also a tremendous risk for an insurer to cover. The question is whether a homeowner, having spent for purchase and installation, is willing to take the budgetary hit in premiums for additional insurance coverage. Alternatively, will the owner risk leaving such a capital expense uninsured? The good news is that such a choice might not be necessary.

Policies Favoring Solar Panels

According to CSMonitor, many insurance providers treat solar panels as they would a home security system or a balcony: as a permanent attachment to the property. Because of this determination, the panels are considered a part of the house, and therefore subject to whatever benefits apply to damage from fire or the violence of the elements (flood always requires a specific and separate policy). This is in contrast to property separated from the house, like a detached garage or storage structure, which normally receive only 10 percent of replacement cost from standard home insurance coverage. This is cause for relief for many cost-conscious property owners seeking to cut their energy bills.

There are, of course, caveats to such indemnity. For example, while wind and rain damage are common claims against standard homeowners policies, hurricanes and tropical storms may carry a higher deductible payment and lower limits on compensation. Those who live in states more frequently subject to hurricanes do well to evaluate how expensive replacement of solar panels would be.

Balancing Payments against Savings

Finding an insurer that includes solar panels in the general hazard policy is a positive development in the financial life of a homeowner. The heavy price of solar panels is paid by those expecting a long-term offset in their energy bills. The last thing they need is for their savings to be eroded by higher insurance premiums or unexpected replacement costs. A comprehensive review of the dwelling coverage is the best place to start when considering the addition of solar panels.

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Breach Fatigue

Study finds evidence of ‘breach fatigue’ as more recent data breaches have less of an impact on stock performance

A data breach can have immediate and long-term implications for a company in terms of consumer trust and regulatory repercussions, but what does it mean for the company’s stock? An analysis by Comparitech.com found that cyber incidents have a relatively subdued impact on publicly traded companies’ stock.

Immediately following a data breach, stocks fell by an average 0.43%, about equal to their average daily volatility, the report found. Stocks continued to rise after disclosure of a breach, but at a much slower pace, according to the report.

In the three years prior to being hacked, share prices increased by an average 45.6%, the report found, but after an attack, average growth slowed to less than 15% in the following three years.

A comparison to the Nasdaq shows that breached companies tend to underperform the index by more than 40% after three years, despite initially recovering to the index level an average 38 days after the breach is disclosed.

The report examined stock performance of 24 companies hit by a data breach that resulted in at least 1 million customer records being lost or exposed. All the companies in the report were publicly listed on the New York, London or Hong Kong stock exchanges at the time they were hit. The resulting list includes companies from multiple sectors: Apple, Adobe, Anthem, BetFair, Countrywide, Community Health Systems, Dun & Bradstreet, Ebay, Experian, Global Payments, Home Depot, Health Net, Heartland Payment Systems, JPMorgan Chase, LinkedIn, Monster, T-Mobile, Sony, Staples, Target, TJ Maxx, Vodafone, VTech and Yahoo.

Not surprisingly, the more time that passes after a data breach, the less of an impact it appears to have on a stock’s performance, the report found. What is interesting, though, is that more recent hacks were not as much of a drag on companies than those that happened prior to 2011.

“Prior to 2010, a data breach was a relatively new concept and it scared people; the idea that company had your information stored somewhere and a hacker could access it,” Paul Bischoff, researcher and privacy advocate for Comparitech.com, and author of the report, told ThinkAdvisor. “It seems like pretty simple stuff now … , but back then it was still something that could scare investors off as well as scare customers off.”

He called public data breaches a “bed of nails effect, where one breach among many doesn’t have as much of an impact.”

While the study did measure some difference in data sensitivity, where breaches that affected credit card or Social Security number resulted in a deeper initial drop, even those companies recovered by an average 23 days later, with no significant impact on long-term growth. Companies that had less sensitive information compromised, such as passwords or email addresses and phone numbers, recorded no initial drop.

“There was no clear trend in the long term about whether data sensitivity has a greater or lesser impact” on those companies’ stock performance, Bischoff said.

What does this mean for clients the next time one of the companies they invest in announces a data breach?

“There’s no reason to panic,” Bischoff said. “You don’t need to dump your stocks the next day. It’s just going to mean that the stock is going to rise at a slower pace.”

However, he also pointed out that the dips in company stocks following a breach aren’t sufficient for opportunistic investors trying to get in at a low point.

“It only goes down on average about half a percent for these big companies,” he said. “They do recover about 38 days later, but because they don’t go down that much, the recovery isn’t really an opportunity to buy a stock shortly after [a company] is breached.”

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How Storms affect Insurance Companies

Three significant storms combined to put a big dent in the first-quarter profit of the nation’s property and casualty insurers.

P&C insurers saw net income after taxes drop to $7.7 billion in 1Q 2017 compared to $13.4 billion for the same period in 2016 — a 42.2% decline — according to a new report from ISO, a Verisk Analytics business, and the Property Casualty Insurers Association of America (PCI).

Overall profitability as measured by its annualized rate of return on average policyholders’ surplus fell to 4.4% from 7.9%.

The industry experienced $7.3 billion in direct catastrophe losses — the highest first-quarter catastrophe losses since the 1994 Northridge earthquake in California and $2.3 billion above the direct catastrophe losses for first-quarter 2016.

“Three major wind and thunderstorm events each resulted in more than $1 billion in damages in first-quarter 2017. That’s the first time we’ve seen three events of that magnitude in the first quarter in more than 60 years,” said Beth Fitzgerald, senior vice president, industry engagement at ISO. “Fortunately, insurers are well capitalized, and short-term volatility in catastrophe losses is not affecting their ability to provide coverage and pay claims.”

The NOAA’s Storm Prediction Center confirms the U.S. endured a particularly destructive start to 2017 based on the number of severe weather outbreaks from January through early April.

There were 5,372 reports of severe weather across the United States in 2017 through April 8, according to the Storm Prediction Center. That figure includes reports of tornadoes, large hail and wind damage.

This is more than double the average of 2,274 for the same period of time during the past 10 years (2007-2016). In that decade, only 2008 had about the same number of severe weather reports by that point in the year with 5,242.

The NOAA notes heavy, persistent rainfall across northern and central California in February created substantial property and infrastructure damage from flooding, landslides and erosion. Notable impacts include severe damage to the Oroville Dam spillway, which caused a multi-day evacuation of 188,000 residents downstream. Excessive rainfall also caused flood damage in the city of San Jose, as Coyote Creek overflowed its banks and inundated neighborhoods forcing 14,000 residents to evacuate.

A pair of separate tornado outbreaks in central and southeast states and in the Midwest in March also caused significant damage.

There was some good news for insurers. Fitzgerald noted that insurers are seeing some acceleration in premiums and investment income. Net written premium growth accelerated to 4% percent for 1Q 2017 from 3.2% in 2016. Net investment gains[1] increased by $1.2 billion to $14.4 billion in 1Q 2017 from $13.2 billion for 2016. The industry’s surplus[2]reached a new all-time high value of $709.0 billion as of March 31, 2017, increasing $8.1 billion from $700.9 billion as of December 31, 2016.

Back in May, ISO and PCI announced that private U.S. property/casualty insurers suffered a $4.7 billion net underwriting loss for 2016 — following an $8.9 billion net underwriting gain in 2015 — and experienced a 25% drop in net income after taxes to $42.6 billion from $56.8 billion a year earlier.

[1]Net investment gains equal the sum of net investment income and realized capital gains (or losses) on investments.

[2]Policyholders’ surplus is insurers’ net worth measured according to Statutory Accounting Principles

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Could Estate Tax impact Life Insurance?

If the Trump Administration achieves its stated objective of repealing the federal estate tax, U.S. life insurers predict it will have a negative impact on survivorship life insurance sales.

In April, LIMRA asked 24 U.S. insurers how they thought repealing the estate tax would affect life insurance sales. Forty percent of carriers said they believe it would have a “significant negative impact” on their survivorship life insurance sales and 54% think it would have a “minor negative impact” on their single life sales.

While six in 10 surveyed (58%) do not expect U.S. estate tax law to change this year, if it is repealed three-quarters believe it would have a significant negative impact on industry survivorship life insurance sales in the following year.

Current federal estate tax law only applies to estates exceeding $5.49 million per person, with a 40% top tax rate. Since Americans can leave an unlimited amount of assets to their spouses, the threshold for married couples is $10.98 million. According to the Joint Committee on Taxation, roughly 0.2% of Americans, or one out of every 500 people who die, are impacted by the estate tax. This includes family owned businesses and farms.

Survivorship life insurance is intended to pay federal estate taxes and other estate-settlement costs owed after both spouses pass away. It represents approximately 4% of the life insurance market and 10% of premium for companies who offer it annually. LIMRA notes that the carriers participating in the survey represent 64% of the survivorship life insurance market.

Beyond the LIMRA study about how carriers think it would impact future sales, the issue also begs the question of whether families with current life insurance policies who would potentially be subject to the estate tax would question the necessity of those policies moving forward. Would life insurance agents who specialize in working with high net worth clients who need life insurance to address estate tax issues need to rethink their business model, perhaps transitioning to wealth management?

Those who might think about canceling policies would first want to consider the following:

• Even if the federal estate tax is repealed, individual states may keep their estate tax.

Currently, 14 states and the District of Columbia have an estate tax, and six states have an inheritance tax. Maryland and New Jersey have both. State estate taxes can kick in for estates valued at only $1.5 million or less in several states.

• If it is repealed, it could very well be back in 10 years.

Republicans would need several Democrats to support estate tax repeal in order to achieve a supermajority — 60 votes — and avoid a filibuster, which is unlikely. Republicans can bypass the need for 60 votes and achieve repeal with a simple majority in the Senate by passing it through budget reconciliation. But as current rules dictate that any legislation passed under reconciliation must “sunset” after a decade if it would increase the budget deficit outside of a 10-year window, it is likely that the estate tax would return without further action down the road. That could put families subject to the estate tax who canceled their life insurance in a tight spot, as they may not be able to obtain new coverage – or may have to pay much more for it.

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Insurance Wallet

There is a new group that just launched on Facebook and it is called Insurance Wallet.

We expect big things to come from this group with Big Ideas from Industry Leaders from all over the world.

If you would like to join – simply go to INSURANCE WALLET.

Only Licensed Insurance Agents or Brokers will be allowed in this group


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Traveling is Good for You

In 2015, Americans left a total of 658 million vacation days unused. Studies show that when you deprive yourself from taking a break, it affects your overall performance. A report came out from Project: Time Off that stated that employees are taking way less vacation time than ever before.  

Recently, The Huffington Post came out with a great article that shared several reasons why traveling is good for your body and soul. If you are interested, you can read the whole
article here.
 Here’s what we learned from this eye opening piece:

1.  You’ll Get Back in Shape – often trips are more active than your daily life so getting out and about can get your body moving.
2.  You’ll Engage in new Surroundings and Eliminate Stress – According to experts, there are psychological benefits to changing your surroundings including resetting your mind and body and reducing stress.
3.  You’ll Wind Down and Rest Up – we have one word for you – SLEEP. In our daily grind, often sleep gets compromised. On a vacation, sleep is often restored to the recommended 7 hours per night.
4.  You’ll Boost Your Mood – Many studies support the notion that the simple act of getting away can change your mood, lower your stress and improve your overall mental and physical health.

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Fractional Ownership

Fractional ownership is a method in which several unrelated parties can share in, and mitigate the risk of, ownership of a high-value tangible asset, usually a jet, yacht or piece of resort real estate. It can be done for strictly monetary reasons, but typically there is some amount of personal access involved.

In the past several years, the term “shared ownership,” has been used increasingly as a catchall phrase to encompass timeshare, fractional ownership and even both types of destination clubs.

At first glance, this seems quite logical and appealing.  Isn’t it nice to have these disparate ownership types classified under one all-inclusive category?

Isn’t it convenient for professionals in different areas of the vacation home industry to attend the same meetings, share ideas online and read the same publications?

While I appreciate the attractiveness of this new-found togetherness, I’ll pass on the opportunity to sing kumbaya.

Fractional ownership, I believe, is significantly different from timeshare and must be clearly distinguished from it in order to maximize sales success.

The reason, simply and bluntly, is that significant numbers of buyers still figuratively “runs for the hills” at the mere suggestion that a property may be a “timeshare.”  (The reason will be discussed shortly.)

I write this reluctantly and with apologies to my numerous friends active in timeshare and to the industry leaders who have labored long and hard over the decades to improve timeshare’s public image.  I believe that a negative attitude toward timeshare is no longer justified; nevertheless, it continues, regrettably, to exist in the mind of some potential purchasers.

For this reason, fractional ownership has everything to lose and nothing to gain by being identified as “shared ownership” or as “timeshare.”

To clarify some of the major distinctions between the two property types, let’s examine some objective differences between fractional ownership and timeshare:

1. Number of owners per unit.

Timeshare is designed to have fifty-two owners per unit.  Fractional properties have about sixteen to four owners per unit.

2. Ranges of owner vacation use per year.

Timeshare owners usually purchase one week of use per year or sometimes a package of two weeks. (Owners on a budget may choose to vacation for one week every other year.)

Fractional owners enjoy from about three to twelve weeks of vacation use per year.

3. Differences in the atmosphere between fractional ownership and timeshare properties.

With about fifty-two owners per residence, timeshare properties will experience considerably more traffic and more wear and tear.

With fewer owners per residence, fractional properties offer a more relaxed vacation experience.  There is far less hustle and bustle from transient vacationers arriving and departing. Also, service is more personalized, since the staff can get to know owners better.

4. Differences in household income of fractional vs. timeshare owners.

The minimum qualifying household income for timeshare starts at about $75,000.

The minimum qualifying household income for fractional properties is about $150,000.  (This is approximately in the top five per cent of American households.)

For private residence clubs, minimum qualifying household income is about $250,000.  (This is approximately in the top two per cent of American households.)

The significant differences in household income result in a clientele for fractional ownership that is distinctly different from the clientele for timeshare.

The fractional clientele is more demanding.   The owners want what they want when they want it.  They require very high levels of quality and personalized service.  They value on their precious vacation time and are willing to pay for the convenience of having others serve them.

5. Differences in quality level between fractional ownership and timeshare properties.

Most fractional properties tend to have a better location within the resort, a higher level of construction and furniture, fixtures and equipment as well as more amenities and services than most timeshares.

Since owners of fractional properties have a larger financial stake in their property and higher disposable household income, they have the motive and means to keep their property in good repair.

6. Differences in numbers of total units in fractional vs. timeshare properties.

Timeshare developments tend to be large—sometimes in the hundreds of units.

Fractional developments don’t often exceed fifty units.  As a result, vacations at fractional properties feel more intimate, personalized and exclusive.

7. Differences in purchase motives of fractional vs. timeshare buyers.

Timeshare purchasers are often motivated more by vacation exchange opportunities than by the particular property to which they have a deeded week.  They may feel little loyalty to the property where they just happened to enter the exchange network.

Fractional owners have usually visited the resort or city where they own their property a number of times prior to purchasing.  They think of their fractional property as their second home, and have feelings of loyalty to it and to the area.

Nevertheless, many fractional owners appreciate the potential of not being tied exclusively to vacationing at their own property.  They are now willing to participate in fractional vacation exchanges offered by several companies—IF the exchanged properties can meet or exceed the quality level of what they own.

8. Differences in the Unique Selling Proposition of fractional ownership vs. timeshare.

Timeshare is offered as a smart, money-saving alternative to hotel stays and vacation rentals.  It is also a way to insulate buyers against inflation in the future cost of vacations.  Timeshare makes vacationing possible for people who would otherwise have been unable to afford yearly vacations.

Fractional ownership is offered as a smart, money-saving alternative to whole ownership. Purchasers buy only the amount of vacation use that they can realistically enjoy and pay only a fraction of the acquisition price and annual upkeep.

In some instances, fractional ownership enables purchasers to own a higher quality property than would have been possible with whole ownership.  Or, fractional ownership makes possible the acquisition of multiple vacation homes at dissimilar destination resorts.

In many cases, fractional buyers present the same economic profile as whole ownership buyers.

9. Differences in resale potential between fractional ownership and timeshare.

Purchasing a timeshare is in a way like taking title to a new car.  The car loses value the moment you drive it out of the showroom.  Similarly, timeshares, if they can be resold at all, tend to depreciate.

Timeshares, in general, do not hold their original market value.  The substantial marketing and sales expenses incurred in selling a single residential unit fifty-two times—which may amount to 50% of the original price—are passed on to purchasers.  When these purchasers try to resell, these marketing and sales costs do not translate on the open market into real estate value.

In addition, the vast numbers of essentially similar timeshares offered for sale must compete for purchasers not only against each other, but also against new product that comes on to the market.

Fractional ownership, on the other hand, is similar to deeded ownership of one’s primary residence.  Historically, fractional ownership properties have proven to perform at resale like whole ownership vacation real estate in their local market.  In fact, in some cases, fractional ownership resale values have out-performed those of whole ownership properties.

Purchasers of fractional ownership obviously seek to enjoy the vacation use of their property.  However, they also expect it to hold its value and appreciate over time.  This is a key reason why buyers who want an investment in real estate prefer fractional ownership and turn away from timeshare properties.

10. Differences in the public image of timeshare vs. fractional ownership.

In the 1960s and 1970s timeshares in the United States had a bad reputation because some developers over-promised and under-delivered.  In addition, high-pressure sales tactics put off many people.

To remedy the situation, all states passed stringent disclosure and other consumer-protection regulations.  Also, the timeshare industry’s professional organization, ARDA, adopted a code of business ethics for its members.

In the 1980s, when major national hotel brands such as Hilton and Marriott entered the industry, they improved the quality of the timeshare experience, legitimized it and lent their credibility to it.

Nevertheless, in the minds of some people today, timeshare has not entirely lost its stigma.

Fractional ownership, on the other hand, is burdened by none of this baggage.

In the United States, it started in the 1980s, primarily in New England and Canadian ski areas, then it spread in the 1990s to western United States ski areas. Toward the end of the twentieth century, national luxury hotel companies, such as Ritz-Carleton and Four Seasons entered the industry, thus adding the power of their branding to fractional ownership.

Around the same time, the fractional jet and yacht industries ran successful advertising campaigns that persuaded consumers that it was smart to share ownership of super-luxury possessions.  The word fractional became associated with glamor, luxury and living the lifestyles of the rich and famous.   So, the fractional industry took off (no pun intended) both figuratively and literally.

And what is the one similarity between fractional ownership and timeshare?

The inconvenient truth is that legally both fractional ownership and timeshare just happen to be defined as “shared ownership” in just about every country in the world and fall under the same or similar rules and regulations.

Now, it seems to me that people who want luxury vacations and a real estate investment need to understand that fractional ownership is the name of what they want.  After all, why should the tail (i.e. a shared legal definition) wag the dog (i.e. the luxury vacation experience and solid real estate value)?

So, how should a sales person respond to a customer asking, “Is this a timeshare?”  How about this answer:

“Are you thinking about resale value?” [Answer, “Yes”]

“Then, you’ll be pleased to know that fractional ownership offers a deed similar to that of your primary home.  You can resell your fractional property through real estate brokers, and resale values typically follow values of whole ownership properties.  Is this something that interests you?”

The bottom line:  Fractional ownership vs. timeshare.

The ten objective dissimilarities outlined above between fractional ownership and timeshare are valid points of difference.

And, the one similarity in legal treatment seems rather minor relative to the quality of vacation experience and real estate investment that fractional ownership offers.

So, let’s stop calling fractional ownership “timeshare” or even “shared ownership.”  Technically, they both may be fruit, but the experience of each is different.  And let’s end this needless confusion and silly discussion once and for all!

It’s high time to find out from prospects what quality of vacation experience they desire and what investment objectives they hope to achieve through ownership.  Then, offer them the type of property they say they want!

What do you think?  Are fractionals and timeshare the same to you?  Should they both be classified, as “shared ownership”?  How do marketing and sales programs differ, if at all?  What other differences do you believe exist between fractionals and timeshare.  We value your ideas and invite your response.

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Can your driving habits save you money?

Could usage-based insurance save you money?

Many auto insurers are offering usage-based policies that base your premium partly on how much or how well you drive. Here are three things to know when deciding if this type of policy is right for you.

1 How does it work?


Most usage-based insurance policies have drivers plug a small device into their car’s diagnostic port, which is usually under the dashboard. Others use cell phone connections or apps. All of them send information about your driving to your insurer. That information can include where and when you drive, how fast you go, and your braking and acceleration habits, among other things.

Your insurer then uses the data – along with other factors such as your age, type of car, and driving record – to set your premium. Some companies offer discounts if you don’t drive very much. Others look at when and how you drive and give you a discount for things like driving mostly during the day, not exceeding 80 miles per hour, or not braking hard too often.

2 Is it a good deal?

It could lower your premium if you drive safely and don’t rack up a lot of miles. Some companies provide discounts for people who drive less than 10,000-15,000 miles a year, depending on the policy. Be sure to read the policy’s terms closely and know exactly what information your insurer is using and how it will affect your rates.

3 What about my privacy?

Here are some questions to ask when considering this type of policy:

  • What device will my insurer use to track my driving? What exactly will be monitored?
  • Do I want my insurer to have information about my driving?
  • Do I think my driving behavior will help lower my premiums?
  • How much could I save?
  • Could that information be used after an accident?
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