More Scandal in Texas
But he quit after a few weeks, so Smith revoked General American’s license and the Texas attorney general got ready to start bankruptcy proceedings.
Texas insurance men thought that Erwin, who had gained his experience in the stable business of life insurance, had been out of his depth in the risky casualty business. In his eagerness to expand two-year-old General American, Erwin had taken on too much risk business. Said one insurance agent: “If you were running truckloads of nitroglycerine over the rough road to Acapulco. General American would insure you.” The company’s loss ratio was estimated to be running as high as 70% (v. a normal ratio of 40% to 50%).
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