2010 FARM outlook projects decrease in incurred claims, marginally less premium written

The Facility Association Residual Market (FARM) is projecting premiums written and claims incurred for all FARM vehicles in 2010 — both private passenger and non-private passenger (including commercial vehicles) — that are very much in line with the projected results for 2009.
In a bulletin to members, Facility Association provided a FARM Outlook for Calendar Years 2009 and 2010 based on October 2009 Participation Reports.
The numbers show FARM predicting 2010 premiums written of $248.5 million for all vehicles. This is down slightly, but nevertheless comparable, to the estimated total of $259.8 million premiums written in 2009.
Premiums written for all FARM vehicles in 2008 totalled $276.3 million.
Also, based on FARM’s annual projections, claims incurred for all FARM vehicles is expected to decline on a year-to-year basis.
For example, the FARM outlook shows claims incurred during 2008 amounted to $212.3 million, falling to $175.4 million (estimated in 2009) and down to about $169 million (projected in 2010).
The 2010 FARM projections come with all sorts of caveats.
“Be advised that the exhibits were prepared at the request of Facility Association for a specific audience, that being the member companies of Facility Association,” the bulletin reads. “It was prepared for the express purpose of assisting member companies to estimate their share of FARM results for planning purposes.
“It is not intended, nor is it necessarily suitable, for any other purpose.”
FARM further noted there is an inherent limitation to the accuracy of its outlook, given the number of assumptions it had to make to produce the numbers. “Therefore, it should be recognized that future operating results may deviate from these estimates by material amounts.”  
The outlook can be found on the FARM Web site at:
http://www.facilityassociation.com/outlook.asp