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PostPosted: Sat Nov 30, 2019 11:22 pm 
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came across this on the net thought it might be of interest

(Reuters) - A Bermuda-based insurer that recently severed ties with an Uber Technologies Inc affiliate said on Thursday the risk of providing driver ride-hailing coverage had become too great and that it had mispriced policies during its initial years on the account.

James River Group Holdings Ltd said on Oct. 8 it would cut ties with a unit of Uber, its largest client, and cancel all related policies as of Dec. 31 this year.

Florida was an “outsized contributor” to the insurer’s Uber problems, especially in 2016, given a large number of uninsured and underinsured motorists, said James River Chief Financial Officer Sarah Doran in a call on Thursday with analysts to discuss its third-quarter financial results.

The insurer cut back on its exposure to Uber’s Florida market in 2017, Doran said.

James River boosted its cash reserves by a total of $57 million during the 2019 third quarter. Of that, $50 million was for 2016 and 2017 losses stemming from its Uber account, the insurer said.

James River late Wednesday said it withdrew $1.2 billion in funds held as collateral in a trust created by an Uber affiliate to cover current and future claims.

Insurance is one of the largest expenses for ride-share companies, an issue that many analysts cite as a risk for the ride-share industry’s profitability.

“In Uber, we wrote a new type of risk that originally seemed to be highly profitable,” J. Adam Abram, James River executive chairman and chief executive officer, said in the Thursday call.

But the nature of that risk changed as Uber rapidly expanded into new regions, added tens of thousands of drivers, and moved into other business lines, Abram said. Uber’s businesses now include food delivery and freight.

“Candidly, in some years, we mispriced the risk,” Abram said.

James River’s poor results for its Uber account in 2016 and 2017 spurred it to negotiate a “substantial pricing increase” for 2018 and charge similar rates for 2019, Abram said.

James River bought reinsurance for a third of the Uber account in 2019, but does not expect profits on the account for 2018 and 2019 to offset earlier losses, Abram said.

A new California law designed to limit the use of “gig” workers ultimately swayed James River to cancel the Uber account, despite coverage now being “well-priced,” Abram said.

The law, which goes into effect on Jan. 1, 2020, spells out when companies must treat “gig economy” contract workers, such as ride-hailing drivers, as employees. “We believe (it) will adversely alter the claims profile for ride-share companies,” Abram said.

James River expects to process about 18,500 Uber-related claims while winding down the account, Abram said.

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PostPosted: Sun Dec 01, 2019 6:14 pm 
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Quote:
“In Uber, we wrote a new type of risk that originally seemed to be highly profitable,” J. Adam Abram, James River executive chairman and chief executive officer, said in the Thursday call.

All insurance is profitable unless you have the 18,000+ claims they are dealing with at present.

In short they f***ed up, and have done the right thing by running for the hills.

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PostPosted: Sun Dec 01, 2019 9:39 pm 
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Maybe it'll be the end of poober if they can't get anyone to insure their business?


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PostPosted: Mon Dec 02, 2019 6:39 am 
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roythebus wrote:
Maybe it'll be the end of poober if they can't get anyone to insure their business?


I doubt if it's risky enough that it's uninsurable - don't know much about the industry, to be honest, but I've always generally assumed that everything's insurable at the right price.

Which seems to have been what went wrong here - the business does specifically say that the problem is that they 'mispriced' Uber's business, and are now, er, paying the price.

However, the real reason for withdrawal doesn't seem to be the original mispricing, but the decision of Californian regulators to make Uber drivers employees, although it's not spelt out precisely what the insurance implications are.

But apart from that, it's stated that the coverage is now 'well-priced', so essentially the original problem was just a massive miscalculation, although the employee thing now seems to be a game-changer.

Quote:
A new California law designed to limit the use of “gig” workers ultimately swayed James River to cancel the Uber account, despite coverage now being “well-priced,” Abram said.

The law, which goes into effect on Jan. 1, 2020, spells out when companies must treat “gig economy” contract workers, such as ride-hailing drivers, as employees. “We believe (it) will adversely alter the claims profile for ride-share companies,” Abram said


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PostPosted: Mon Dec 02, 2019 1:10 pm 
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If they are employees in the US like the UK you have to have Liability insurance I believe which means you can be sued for damages for every sexual assault, rape murder etc.etc.

I think in some states too health insurance is compulsory

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