Friday, November 25, 2011

Merit Rating Plan: What is it?

Merit Rating Plan is a common term used by insurance companies and state regulators. In general this is something used by insurance companies to define how they might increase or decrease insurance rates.

In the world of car insurance, a merit rating plan would look at the driving record of the insured. If you have a history of accidents or traffic violations, that would lead to increases in your premiums. If you have a clean record that would then hopefully lead to decreases.

Massachusetts refers to its system as the Merit Rating Board.

Delaware and Pennsylvania use the term for workers compensation: Compensation Rating Bureau for DE and PA.

We have seen the term used in the back of car insurance policies in New York State and it is also important in New York Medical Malpractice Insurance. The term does not appear to be used much in Florida, however.

Friday, November 18, 2011

Traffic Court - Value of a Website

Yesterday's Wall Street Journal article on Angie's List upcoming IPO suggests that the site will be valued at $723 million based on a share price of $13. At this writing the stock is now trading at $16/share, making the company worth nearly $900 million.

You can see by the graphic that Angie's List had 2.1 million unique website visitors in October, and that the site loses an awful lot of money.

What if there was a website that had about 13% of the number of unique visitors, and that website actually was profitable? You would think that website would be worth at least 13% of what Angie's List is worth.

For all you web investors out there buying stock in and Angie's List, may we suggest you consider
While our revenue is much lower, we have a secret trick to earning profits. We spend very little money. And we're happy to sell at a substantial discount off our apparent $100 million valuation. Call me. :-)

To avoid federal persecution, please note that I'm kidding. And just in case, pretend that we've added all kinds of disclosures required by Sarbanes-Oxley, and whatever other SEC regulations there are, just in case.