Volume I, Issue I
August 29, 2007

IMA’s stated purpose is to “protect assets and make a difference”.   This statement is very important to the associates of IMA.   The first half of the statement talks about the businesses we are in but it is the second half of the statement that defines the type of company we want to be.   Making a difference in the lives of our associates and their families, within our communities and especially on behalf of our clients is really what makes IMA who we are. When we talk about making a difference we often discuss internally that this statement can mean a lot of things but to us it means doing the little things better than anyone else. Hopefully we do that for you each and every day.

Over the years a number of our clients have suggested that one of the little things that would make a difference would be if IMA could provide an update on our perspective of what is going on in the marketplace. It is with this in mind that we are happy to bring to you the first edition of IMA Industry Update, a periodic e-newsletter about what is happening in our industry.

We think this first edition is extremely timely because we are in a stable yet uncertain market for a number of reasons.   First and foremost the insurance industry is coming off another strong quarter relative to financial performance.   This is happening despite the fact that the price of insurance coverage is falling – known as a soft insurance market. The profitability is being driven by the fact that there have been relatively few major claims, especially in the area of terrorism, earthquake and windstorm. The lack of major claims has also helped the reinsurance marketplace and that sector seems to be performing well. As a result, loss experience has been favorable for the past two years and there appears to be nothing on the horizon that would change that over the next year. Finally, most insurance companies have redundancy in their reserves and have an ample amount of cash flow. All of this helps their financial performance and puts continued downward pressure on pricing.

However, there is still a fair amount of uncertainty in the marketplace. The industry is not yet clear on how Congress will deal with the renewal of TRIA (Terrorism Reinsurance Act) and the proposed reform relative to Surplus Lines business – both of which we support because of their stabilizing influence in terms of capacity and pricing.   Although the market appears strong on the surface there is concern that the falling prices are influencing underwriting decisions which, combined with the anticipation that the soft market will continue to escalate, could negatively impact financial performance.

Ultimately, the downward pressure on pricing is having a huge impact on intermediaries – including the many types of organizations that work with carriers and clients to help reduce, mitigate and place risk.   The large regional intermediaries seem to be weathering this storm the best and continue to grow organically, while the larger national and international intermediaries have begun to depend on mergers and acquisitions to meet the growth demands of their shareholders.

These kinds of issues facing our industry and the turbulence around them are why we think this is a great time to launch this communication initiative. Inside this edition you will find a state of the marketplace report, an economic briefing from David Strohm, President of IMA’s subsidiary TrueNorth, Inc., a registered investment advisor company, and finally you will see an overview of IMA’s newest product IMA Life IQ^SM.    We hope that this information will help you to navigate the marketplace and truly make a difference for you and your company.

Robert L. Cohen
Chairman and CEO
The IMA Financial Group, Inc.

Hot Topics

Market Conditions
COMMERCIAL PROPERTY/CASUALTY PREMIUMS CONTINUE FREE-FALL IN 2nd QUARTER
Commercial property-casualty insurance rates continued their free-fall during the 2nd quarter of 2007 in a marketplace environment described as "totally unpredictable" in terms of pricing and underwriting, according to the latest commercial market index survey by The Council of Insurance Agents & Brokers. Learn more>>

Economic Forecast
HURRICANE SUB-PRIME!
Recent action in the global equity markets has felt like riding out a hurricane, and has increased anxiety amongst investors. This volatility, the most in four years, follows a market with abnormally low price swings. The current round of downs and ups has not been exceptionally high when measured over a longer period of time. Corrections of 10 to 20% are common during bull markets.
Learn more>>

It’s Not Just A Wellness Program -
Examining How a Business Manages the Total Cost of Health
One of the most significant issues facing employers today is the continued escalation of corporate health plan costs. Costs have doubled from 1990 to 2001 and are projected to double again by 2012¹.   After more than a decade of cost-shifting to employees, plan design modifications and changing insurance carriers, employers are demanding a long-term solution. Health care “consumerism” (the empowering of employees to become wise consumers in the health care marketplace) and employee wellness programs are two of the options many companies are utilizing today to stabilize corporate health care costs.
Learn more>>

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Volume I, Issue I		August 29, 2007
	IMA’s stated purpose is to “protect assets and make a difference”. This statement is very important to the associates of IMA. The first half of the statement talks about the businesses we are in but it is the second half of the statement that defines the type of company we want to be. Making a difference in the lives of our associates and their families, within our communities and especially on behalf of our clients is really what makes IMA who we are. When we talk about making a difference we often discuss internally that this statement can mean a lot of things but to us it means doing the little things better than anyone else. Hopefully we do that for you each and every day. Over the years a number of our clients have suggested that one of the little things that would make a difference would be if IMA could provide an update on our perspective of what is going on in the marketplace. It is with this in mind that we are happy to bring to you the first edition of IMA Industry Update, a periodic e-newsletter about what is happening in our industry. We think this first edition is extremely timely because we are in a stable yet uncertain market for a number of reasons. First and foremost the insurance industry is coming off another strong quarter relative to financial performance. This is happening despite the fact that the price of insurance coverage is falling – known as a soft insurance market. The profitability is being driven by the fact that there have been relatively few major claims, especially in the area of terrorism, earthquake and windstorm. The lack of major claims has also helped the reinsurance marketplace and that sector seems to be performing well. As a result, loss experience has been favorable for the past two years and there appears to be nothing on the horizon that would change that over the next year. Finally, most insurance companies have redundancy in their reserves and have an ample amount of cash flow. All of this helps their financial performance and puts continued downward pressure on pricing. However, there is still a fair amount of uncertainty in the marketplace. The industry is not yet clear on how Congress will deal with the renewal of TRIA (Terrorism Reinsurance Act) and the proposed reform relative to Surplus Lines business – both of which we support because of their stabilizing influence in terms of capacity and pricing. Although the market appears strong on the surface there is concern that the falling prices are influencing underwriting decisions which, combined with the anticipation that the soft market will continue to escalate, could negatively impact financial performance. Ultimately, the downward pressure on pricing is having a huge impact on intermediaries – including the many types of organizations that work with carriers and clients to help reduce, mitigate and place risk. The large regional intermediaries seem to be weathering this storm the best and continue to grow organically, while the larger national and international intermediaries have begun to depend on mergers and acquisitions to meet the growth demands of their shareholders. These kinds of issues facing our industry and the turbulence around them are why we think this is a great time to launch this communication initiative. Inside this edition you will find a state of the marketplace report, an economic briefing from David Strohm, President of IMA’s subsidiary TrueNorth, Inc., a registered investment advisor company, and finally you will see an overview of IMA’s newest product IMA Life IQ^SM. We hope that this information will help you to navigate the marketplace and truly make a difference for you and your company. Robert L. Cohen Chairman and CEO The IMA Financial Group, Inc.	Hot Topics Market Conditions COMMERCIAL PROPERTY/CASUALTY PREMIUMS CONTINUE FREE-FALL IN 2nd QUARTER Commercial property-casualty insurance rates continued their free-fall during the 2nd quarter of 2007 in a marketplace environment described as "totally unpredictable" in terms of pricing and underwriting, according to the latest commercial market index survey by The Council of Insurance Agents & Brokers. Learn more>> Economic Forecast HURRICANE SUB-PRIME! Recent action in the global equity markets has felt like riding out a hurricane, and has increased anxiety amongst investors. This volatility, the most in four years, follows a market with abnormally low price swings. The current round of downs and ups has not been exceptionally high when measured over a longer period of time. Corrections of 10 to 20% are common during bull markets. Learn more>> It’s Not Just A Wellness Program - Examining How a Business Manages the Total Cost of Health One of the most significant issues facing employers today is the continued escalation of corporate health plan costs. Costs have doubled from 1990 to 2001 and are projected to double again by 2012¹. After more than a decade of cost-shifting to employees, plan design modifications and changing insurance carriers, employers are demanding a long-term solution. Health care “consumerism” (the empowering of employees to become wise consumers in the health care marketplace) and employee wellness programs are two of the options many companies are utilizing today to stabilize corporate health care costs. Learn more>>
	The IMA Financial Group, Inc. \| www.imacorp.com Boston \| Dallas \| Denver \| Kansas City \| Los Angeles \| Topeka \| Wichita
	If you no longer wish to receive these bulletins, please click UNSUBSCRIBE to be permanently removed from this e-mail list. All contents of this site © The IMA Financial Group, Inc. All rights reserved. View Privacy Policy CA: dba IMA of Colorado Insurance Services Lic#OB09724 \| IMA of Texas, Inc. dba IMA of Texas Insurances Services Lic#OF04115 \| IMA of Kansas, Inc. dba IMA of Kansas Insurance Services Lic#OD28748