TheK-ManRocks <***@gmail.com> wrote:
: On Monday, April 12, 2021 at 8:50:27 AM UTC-4, Alan Conceicao wrote:
: > > "high cost of insurance"...
: >
: > https://en.wikipedia.org/wiki/Liability_insurance_crisis
: >
: > No one in enthusiast circles talks about it because no one ever connected the
: dots before best I can tell. I assume that it was noteworthy enough to be in
: ACE's publications in the 80s but who the hell knows.
: ____________
:
: So either through greed, or a combination of possibliities as outlined in
: the Wiki, insurance companies made it more difficult for "outdoor
: recreation" providers (amusement parks, temporary carnivals, etc,) to
: insure themselves in the event of harm to patrons or staff through ride
: malfunctions, fires, and unforeseen incidents.
It was a combination of factors. There was an explosion of litigation at
the time and a general increase in settlements for ever increasing amounts.
There was also financial pressure all over...in hindsight it's not
surprising that this happened as we were emerging from those dark days of
"stagflation" and the extraordinarily high interest rates that finally
brought inflation under control. Financially there was a period of moderate
deflation and a sudden crash in interest rateswhich left investment
organizations (like insurance companies) scrambling for ways to increase
capital. We lost a number of insurance companies during this period as
well, as smaller companies could no longer be profitable and smaller
independent agents were being squeezed very hard. Companies were being hit
from both sides: much higher losses, and much lower returns on investments,
meaning the money to both operate and to pay claims had to come from
somewhere. Or the companies simply exited that line of business entirely.
: I guess larger chain parks, such as Six Flags, Cedar Fair, could simply
: absorb the higher costs of insuring themselves via annual ticket price
: increases, and other sources of revenue(add-on attraction fees not
: included at the admission gate, skyrocketing parking fees, etc).
Businesses that were large enough in some cases turned to self-insurance
for a time. Companies that did also started going overboard with trying to
eliminate risks in their parks. Not just amusement parks and carnivals, but
even municipalities. This is when the swing-sets and sliding boards
disappeared from the city parks, sledding hills were barricaded, pools and
ponds were shut down, fireworks shows were canceled...a lot of things that
disappeared back then have simply never come back. When was the last time
you saw a Swingin' Gym in an amusement park?
Eventually a few things started to happen. Insurers started to fight back
in court instead of settling large claims. Sometimes even the appearance of
a willingness to fight a claim was enough to reduce the settlement.
Interest rates stabilized so that investment strategies could adapt.
Reforms in insurance practices and in legal limitations helped as well. And
for the amusement industry, specialty insurance brokers were able to fill
in the gap and aggregate clients so that they could provide insurance
services. At the same time the industry shifted from being more risk averse
to getting much better at risk management. Amusement safety was now being
seen as a discipline separate from, though tightly bound with inspection,
maintenance and operations.
--Dave Althoff, Jr.
/X\ _ *** Respect rides. They do not respect you. ***
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