{"id":9908,"date":"2025-03-14T09:00:00","date_gmt":"2025-03-14T09:00:00","guid":{"rendered":"httpss:\/\/www.advantagego.com\/en-us\/?p=9908"},"modified":"2025-03-14T10:18:11","modified_gmt":"2025-03-14T10:18:11","slug":"voi-podcast-with-ian-gutterman-portfolio-manager-and-analyst","status":"publish","type":"post","link":"https:\/\/www.advantagego.com\/en-us\/content\/voi-podcast-with-ian-gutterman-portfolio-manager-and-analyst\/","title":{"rendered":"&#8216;Nominal returns&#8217; \u2013 Analyst Blogger features on latest Voice of Insurance episode"},"content":{"rendered":"\n<p><iframe title=\"Ep244 Ian Gutterman: Insurance Hot Potatoes and Movie Sequels\" allowtransparency=\"true\" height=\"150\" width=\"100%\" style=\"border: none; min-width: min(100%, 430px);height:150px;\" scrolling=\"no\" data-name=\"pb-iframe-player\" src=\"https:\/\/www.podbean.com\/player-v2\/?from=embed&amp;i=5nge4-18350da-pb&amp;share=1&amp;download=1&amp;fonts=Tahoma&amp;skin=3267a3&amp;font-color=&amp;rtl=0&amp;logo_link=&amp;btn-skin=1b1b1b&amp;size=150\" loading=\"lazy\"><\/iframe><\/p>\n\n\n\n<p><strong>Ian Gutterman, Portfolio Manager and Investment Analyst, and author of the \u2018Ian\u2019sB&amp;R\u2019 blog providing expert analysis on the financial performance of insurance companies.<\/strong><\/p>\n\n\n\n<p>The latest guest of the Voice of Insurance podcast is a departure from the usual fare. Rather than a CEO or chief underwriting officer telling us about their grand plans, spread of business, or senior leadership career, the most recent episode is an analyst\u2019s tale.<\/p>\n\n\n\n<p>Ian Gutterman might not be as well-known as some guests, but his influence and knowledge are top rate.<\/p>\n\n\n\n<p>Gutterman is the insurance stocks and shares analyst behind one of the most compelling and knowledgeable blogs \u2013 known as \u2018Nominal Returns\u2019 or \u2018Ian\u2019s B&amp;R\u2019 \u2013 which takes a cold eye to the performance of insurance industry giants from an investor\u2019s perspective.<\/p>\n\n\n\n<p>Gutterman able to do this because he\u2019s been in-house as an equity analyst for decades and has an in-depth knowledge of insurance performance and strategy, from CEOs, through the assets and underwriting sides, towards owners and shareholders.<\/p>\n\n\n\n<p>Some of his recent blog entries have focused on the recent Los Angeles wildfires. The fires have exposed the deep fractures in California\u2019s insurance market, raising concerns about long-term insurability in the state. According to Gutterman, the crisis is not simply a matter of increasing wildfire severity but is largely driven by a regulatory environment that has hindered insurers from adapting to the realities of modern catastrophe risk.<\/p>\n\n\n\n<p>\u201cCalifornia has some very extreme regulations around pricing,\u201d he says. \u201cFor 30 years it&#8217;s been very difficult to raise prices if you&#8217;re in California without regulatory approval, which is almost impossible to get.\u201d<\/p>\n\n\n\n<p>The problem, as Gutterman points out, is that loss trends have far outpaced the pricing caps imposed by regulators.<\/p>\n\n\n\n<p>\u201cWhen loss trends were benign, insurers could live with that. But with the recent spikes in catastrophic losses, the system doesn&#8217;t work anymore.\u201d<\/p>\n\n\n\n<p>This regulatory stranglehold has left insurers in a precarious position. With companies unable to raise rates sufficiently to match the growing exposure, many are pulling back from the market entirely.<\/p>\n\n\n\n<p>\u201cA lot of people got comfortable with the idea that California homeowners\u2019 loss ratios were stable for a long time,\u201d Gutterman says. \u201cBut what they didn\u2019t realise was that, relative to the risk they were taking on, pricing was falling further and further behind. And now, they\u2019re in a position where they simply can\u2019t catch up.\u201d<\/p>\n\n\n\n<p>The consequences have been severe. Major insurers have reduced their appetite for writing new policies in high-risk areas, while others have exited the market altogether.<\/p>\n\n\n\n<p>Meanwhile, the state\u2019s insurer of last resort, the California FAIR Plan, is under increasing strain.<\/p>\n\n\n\n<p>\u201cWe\u2019ve got a big problem because we&#8217;ve got the FAIR Plan assessment, and there&#8217;s going to be more again,\u201d Gutterman warns. \u201cThis is an unforced error by regulators. Insurers aren\u2019t leaving California because they don\u2019t want to write business here; they\u2019re leaving because they literally can\u2019t make it work under the current system.\u201d<\/p>\n\n\n\n<p>In other catastrophe-prone states, such as Texas, insurers are allowed to adjust pricing in response to changing risks.<\/p>\n\n\n\n<p>In contrast, California\u2019s rigid framework has led to availability crises.<\/p>\n\n\n\n<p>\u201cLook at Texas over the last 10 years; their cat losses have been just as bad, maybe even worse when you factor in hailstorms and freezes, but they don\u2019t have the same availability crisis because insurers can charge what they need to remain viable,\u201d Gutterman says.<\/p>\n\n\n\n<p>The fundamental issue, according to Gutterman, is that California\u2019s pricing restrictions have created a false sense of affordability.<\/p>\n\n\n\n<p>\u201cPeople in California think they\u2019re getting a raw deal, but the reality is they\u2019re actually getting insurance at below-market rates,\u201d he says. \u201cIf you let the market function properly, it would solve these problems over time. But if you keep suppressing rates, insurers will simply leave, and then the only option left is the government stepping in to take on more and more risk.\u201d<\/p>\n\n\n\n<p>Check out Ian\u2019s blog here. <a href=\"https:\/\/iansbnr.com\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">https:\/\/iansbnr.com\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ian Gutterman, Portfolio Manager and Investment Analyst, and author of the \u2018Ian\u2019sB&amp;R\u2019 blog providing expert analysis on the financial performance of insurance companies. The latest guest of the Voice of Insurance podcast is a departure from the usual fare. Rather than a CEO or chief underwriting officer telling us about their grand plans, spread of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":6594,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[19,26],"tags":[10,14],"line-of-business":[28,20],"class_list":["post-9908","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-podcasts","category-latest-insights","tag-exposure","tag-underwriting-workbench","line-of-business-general-liability","line-of-business-property"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/9908","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/comments?post=9908"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/9908\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media\/6594"}],"wp:attachment":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media?parent=9908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/categories?post=9908"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/tags?post=9908"},{"taxonomy":"line-of-business","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/line-of-business?post=9908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}