Qwerty Maniac and His Keyboard

My Thoughts With My Keyboard ...

Saturday, April 15, 2006

The cutest car maker :D

The VW Type 1, which was called the Beetle or Bug or Käfer (in German), is a small family car, the best known car of Volkswagen, one of the best known cars from Germany, and one of the most recognisable and distinctive cars in the world. Thanks to its distinctive shape and sound, and its reliability, it now enjoys a "cult" status.

The Beetle was in production from 1938 until 2003, interrupted only by the Second World War. Over 21 million Beetles were produced.

The name "Beetle" was not originally given to the car. Inside Volkswagen, it was simply known as the "Type 1" until the 1968 model year (August 1967), when, for the first time, German brochures used the name "Der Käfer" (meaning "The Beetle" in German) on the front cover and inside. In Europe, it was marketed as the VW 1200/1300/1500 before adopting the "Beetle" name given to it by the public. The Beetle name was later reused when the New Beetle was introduced in 1998.


The origins of the car date back to 1930s Nazi Germany. Adolf Hitler wanted private motorized transport to be widely available and commissioned engineer Ferdinand Porsche to produce such a vehicle. Some claim that this was based on a sketch that Hitler drew in 1932, a year before he came to power. Hitler decreed that this car should be capable of transporting two adults and three children at a speed of 100 km/h (62 mph), and that it should cost no more than a motorcycle and sidecar to buy. A savings scheme was also launched that would enable the common people to buy the car. However, the advent and aftermath of World War II meant that those who paid into the scheme never received their cars. Rumors said that the Beetle was originally designed for conversion into a makeshift armored car in times of war. Its style resembles a tankette without a turret or armor.

Who designed the car is a matter of controversy. The official story is that it was designed by Ferdinand Porsche. But in the 1920s Joseph Ganz had already made a similar design for a car that was smaller and more affordable than existing models. Car manufacturers were not interested, but two motorcycle manufacturers were. Adler produced the Maikäfer and Standard the Superior, which it advertised as 'Der Deutsche Volkswagen' and was the cheapest four wheel car at the time. When the Nazis came to power, they tested the Superior and favorable reviews appeared in magazines. However, shortly after, the Nazis suddenly imprisoned Ganz for a while, fired him as chief editor of the magazine Motor-Kritik and confiscated his documents, after which he fled to Switzerland, never to return. The reason for this is probably that they found out he was a Jew. The Nazis then turned to Porsche, who produced a prototype of the Käfer that looked a lot like the Superior. Volkswagen says that Ganz wasn't the only one to have such a design and that the Käfer was not based on his. See also [1]

Prototypes of the car called the KdF-Wagen (German: Kraft durch Freude = strength through joy; the car was so called because it was intended to be sold to members of the KdF, a Nazi leisure organization), appeared from 1935 onwards—the first prototypes were produced by Daimler-Benz in Stuttgart, Germany. The car already had its distinctive round shape (designed by Erwin Komenda) and its air-cooled, flat-four, rear-mounted engine. However, the factory (in the new town of Kdf-Stadt, purpose-built for the factory workers) had only produced a handful of cars by the time war started in 1939. Consequently, the first volume-produced versions of the car's chassis (if not body) were military vehicles, the Jeep-like Kübelwagen Typ 82 (approx. 52,000 built) and the amphibious Schwimmwagen Typ 166 (approx. 14,000 built).

Deliberately designed to be as simple as possible mechanically, there was simply less that could go wrong; the aircooled 985 cc 25 hp (19 kW) motors proved especially effective in action in North Africa's desert heat. The innovative suspension design used compact torsion beams instead of coil or leaf springs.

A handful of civilian-specific Beetles were produced, primarily for the Nazi elite, in the years 1940–1945, but production figures were small. In response to gasoline shortages, a few wartime "Holzbrenner" Beetles were fueled by wood pyrolysis gas producers under the hood. In addition to the Kübelwagen, Schwimmwagen, and a handful of others, the factory managed another wartime vehicle: the Kommandeurwagen; a Beetle body mounted on the 4WD Kübelwagen chassis. A total of 669 Kommandeurwagens were produced until 1945, when all production was halted due to heavy damage sustained in Allied air raids on the factory. Much of the essential equipment had already been moved to underground bunkers for protection, allowing production to resume quickly once hostilities had ended.

Much of the Beetle's design was inspired by the advanced Tatra cars of Hans Ledwinka, particularly the T97. This also had a streamlined body and a rear-mounted 4 cylinder horizontally-opposed air-cooled engine. Tatra sued, but the lawsuit was stopped when Germany invaded Czechoslovakia. The matter was re-opened after WW2 and in 1961 Volkswagen paid Tatra 3,000,000 Deutsche Marks. These damages meant that Volkswagen had little money for the development of new models and the Beetle's production life was necessarily extended.

The Volkswagen company owes its postwar existence largely to one man, Oldham-born British army officer Major Ivan Hirst (1916–2000). After the war, Hirst was ordered to take control of the heavily bombed factory, which the Americans had captured. His first task was to remove the unexploded bomb which had fallen through the roof and lodged itself between some pieces of irreplaceable production equipment; if the bomb had exploded, the Beetle's fate would have been sealed. He persuaded the British military to order 20,000 of the cars, and by 1946 the factory was producing 1,000 cars a month. The car and its town changed their Nazi-era names to Volkswagen (people's car) and Wolfsburg, respectively. The first 1,785 Beetles were made in a factory near Wolfsburg, Germany in 1945.

Production of the "Type 1" Volkswagen Beetle increased dramatically over the years, with the 1 millionth car coming off the assembly line in 1954. During the 1960s and early 1970s, innovative advertising campaigns and a glowing reputation for reliability and sturdiness helped production figures to surpass the levels of the previous record holder, the Ford Model T, when Beetle No. 15,007,034 was produced on February 17, 1972. By 1973 total production was over 16 million, and by 2002 there had been over 21 million produced. The car was known under various names in different countries, usually local renderings of the word "beetle": Käfer in Germany; Sedan, then Fusca in Brazil; Coccinelle in France; Σκαθάρι (Scathari meaning beetle) or Σκαραβαίος (Scaraveos meaning Scarab) in Greece; Maggiolino in Italy; Sedán or Vocho in Mexico; Kever in the Netherlands; kotseng kuba (literally, 'hunchback car')/"pagong" (turtle) in the Philippines; Kodok (frog) in Indonesia;Garbus (literally, 'Hunchback') in Poland; Brouk in Czech Republic; Carocha in Portugal; Escarabajo in Spain and Latin America; Hipushit in Israel; Косτенурка (Kostenurka) in Bulgaria (meaning turtle); عقروقة (Ag-ru-ga) in Iraq; Boble (bubble) in Norway; Bug in the United States.

While production of the standard Beetle continued, a Type 1 variant called the Super Beetle, produced from model year 1971 to 1979, offered MacPherson strut front suspension, better turning radius, and more space in the front luggage compartment. The Super Beetle was improved in 1973 to include a padded dashboard and a curved windshield.

The Super Beetle (VW 1302 and 1303 series) is not the only Type 1 variant; other VWs under the Type 1 nomenclature include the Karmann Ghia and the VW 181 utility vehicle, not to mention the VW Brasilia (a locally produced Brazilian version of the Type 4 using Beetle components) and the Australian Country Buggy (locally produced in Australia using VW parts).

Faced with stiff competition from more modern designs—in particular economical Japanese autos in the U.S.—sales began dropping off in the mid-1970s. There had been several unsuccessful attempts to replace the Beetle throughout the 1960s; but the Type 3, Type 4, and the NSU-based K70 were all failures. Finally, production lines at Wolfsburg switched to the new watercooled, front-engined, front wheel drive Golf in 1974, a car unlike its predecessor in most significant ways.

Like the insect, this Beetle can shed its skin
Like the insect, this Beetle can shed its skin

Beetle production continued in smaller numbers at other German factories until 1978, but mainstream production shifted to Brazil and Mexico. The last Beetle was produced in Puebla, Mexico, in mid-2003. The final batch of 3,000 Beetles were sold as 2004 models and badged as the Última Edición, with whitewall tires, a host of previously-discontinued chrome trim, and the choice of two special paint colors taken from the New Beetle. Production in Brazil ended in 1988, then restarted in 1993 and continued until 1996. Volkswagen sold Beetles in the United States until 1978 (the Beetle convertible a.k.a. Cabriolet was sold until February 1980) and in Europe until 1985.

Other countries produced Beetles from CKD (complete knockdown kits): Thailand, Indonesia, South Africa, Australia, and Nigeria have assembled Beetles under license from VW (source: Volkswagens of the World).

Beetles produced in Mexico and Brazil had several differences:

  • The Brazilian version retained the 1958-1964 body style (Europe and US version) with the thick door pillars and small quarter glass; this body style was also produced in Mexico until 1970. Brazilian CKD kits (complete knockdown) were shipped to Nigeria between 1975-1987 where Beetles were locally produced. The Brazilian-produced version have been sold in neighboring South American nations bordering Brazil, including Argentina and Peru.
  • Beetles produced in Mexico (since 1964) have the larger door and quarter glass between 1971 — 2003 with the 1958 vintage back glass until the mid-1970s. This version, after the mid-1970s, saw little change with the incorporation of electronic fuel injection, electronic ignition, hydraulic valve lifters and an oil filter after 1993, along with a driver-side air bag.

Independent importers continued to supply several major countries, including Germany, France, and the UK until the end of production in 2003. Devoted fans of the car even discovered a way to circumvent United States safety regulations by placing more recently manufactured Mexican Beetles on the floorpans of earlier, US-registered cars between 1998 — 2003. The Mexican Beetle (along with its Brazilian counterpart) was on the US DOT's (Department of Transportation) hot list of gray market imports after 1978 since the vehicle did not meet safety regulations. A U.S. citizen who drives a Mexican Beetle across the US-Mexico border into the US is likely to end up with the vehicle seized by the US government.

In the Southwest United States (Arizona, California, New Mexico, Texas) — Mexican Beetles (and some Brazilian T2c Transporters) are a common sighting in San Antonio and Houston since Mexican nationals can legally operate the vehicle in the United States, as long as they have the registration papers.

The end of production in Mexico can be attributed primarily to the Mexican government's decision to gradually outlaw the use of two-door cars as taxi cabs. Also, the Beetles no longer met air quality requirements for Mexico City, in which the ubiquitous Beetles were used as affordable taxicabs. Another reason the Mexican government has outlawed two-door taxicabs is because of the crime rate: taxi assaults had risen in recent years. The issue of public safety forced the Mexican government to require four-door vehicles to be used as taxicabs. In addition, Volkswagen (now Germany's largest automaker) has been attempting to cultivate a more upscale, premium brand image, and the humble Beetle, with its US$7000 base price, clashed with VW's new identity, as seen in the Touareg and Phaeton luxury vehicles.

Pop culture

Like its competitors the Mini and the Citroën 2CV, the Beetle has been regarded as something of a "cult" car since its 1960s association with the hippie movement; and the obvious attributes of its unique and quirky design. Much like their Type 2 counterparts, Beetles were psychedelically painted and considered an art car ancestor. One of the logos used by the Houston Art Car Klub incorporated a Beetle with a cowboy hat.

From 1968 to 2005, a pearl white Beetle with racing number "53" and red, white, and blue stripes named "Herbie" played a starring role in The Love Bug series of Disney comedy films. A yellow Wunderkäfer, called DuDu, appeared in a series of German films for children. Also made famous is the Autobot Bumblebee, a canary yellow Beetle in the cartoon and toy line The Transformers. Bumblebee was later reformated into the Throttlebot Goldbug, a gold 1975 Super Beetle.

The sci-fi thriller The Arrival featured a few Mexican Beetles in the film — one scene in the film is where Charlie Sheen hides in the trunk.

During the early 1970s, the Beetle was used for advertisements where graphic art ads were decaled on newly-sold Volkswagens to which the Beetleboard craze kicked in. A marketing consultant (Charlie E. Bird) in the Los Angeles area came up with this concept — it would be deemed the progenitor of removing billboards off the highway to which automobiles have been used for advertising media. Both standard and Super Beetles were used until the original Beetle ceased production in Europe in 1978; this trend was resurrected after the New Beetle entered production (source — The Beetle Book).

New Beetle

Main article: Volkswagen New Beetle

At the 1994 North American International Auto Show, Volkswagen unveiled the J Mays-penned "Concept 1", a concept car with futuristic styling deliberately reminiscent of the original Beetle's rounded shape. Strong public reaction convinced the company to move the car into production, and in 1998, 20 years after the original Beetle was sold in the United States, Volkswagen launched the New Beetle, designed by Mays and Freeman Thomas at the company's California design studio.

New Beetles are manufactured at VW's Puebla, Mexico assembly plant.

The New Beetle is related to the original only in name and appearance: under the hood, it is a modern car in every way, based on the Volkswagen A platform. In stark contrast to the original, the Insurance Institute for Highway Safety gave the New Beetle among the best safety ratings in its class at the time of its launch.

Marketing campaigns have enhanced the continued goodwill towards the original, and helped the new model to inherit it. The Volkswagen New Beetle was Motor Trend's Import Car of the Year for 1999.

Phase-out of the original Beetle

In 2002 total production of the VW Golf, at 22 million units, overtook that of the Beetle. However this measure includes all four distinct generations of Golf since 1974, and these are really different cars using the same name, as is also the case with the Toyota Corolla.

By 2003 Beetle annual production had fallen to 30,000 from a peak of 1.3 million in 1971. On July 30, 2003, the final original VW Beetle (No. 21,529,464) was produced at Puebla, Mexico, some 65 years after its public launch in Nazi Germany, and an unprecedented 58-year production run since 1945. VW announced this step in June, citing decreasing demand. The last car was immediately shipped off to the company's museum in Wolfsburg, Germany. In true Mexican fashion, a mariachi band serenaded the last car.

The final edition had the following specifications:

The last Type 1 produced coming out of the production line in Puebla.
  • Length: 4 m (13.32 ft)
  • Width: 1.6 m (5.08 ft)
  • Height: 1.5 m (4.92 ft)
  • Length between axles: 2.4 m (7.87 ft)
  • Weight: 810 kg (1,786 lb)
  • Engine: 4 cylinders, 1.6 L
  • Transmission: Manual
  • Brakes: front disc, back drum
  • Passengers: Five
  • Tank: 40 L (10.57 gallons)
  • Colors: Aquarius blue, Harvestmoon beige.

Wednesday, April 12, 2006

Porsche - The Uber Cool Car Company!

Porsche (Dr. Ing. h. c. F. Porsche AG), properly pronounced as a two syllable word (porsh-eh, IPA: /ˈpɔrʃə/) , is a German manufacturer of sports cars, founded in 1931 by Ferdinand Porsche, the engineer who created the first Volkswagen. The company is located in Zuffenhausen, a city district of Stuttgart.

Porsche has a reputation for producing high-end sports vehicles that, despite their high performance, are reliable and tractable enough to be used for daily driving, and of high manufacturing quality and durability. The current Porsche lineup includes everything from an entry-level roadster (Boxster) to a Supercar (Carrera GT). Future plans include a high performance luxury sedan, the Panamera. Also, Porsche is a leader in modern turbocharging technology, being the latest to use a variable geometry turbocharger.

As a company, Porsche is known for weathering changing market conditions with great financial stability, while retaining most production in Germany during an age when most other German car manufacturers have moved at least partly to Eastern Europe or overseas. The headquarters and main factory are still at Stuttgart-Zuffenhausen, but for the Cayenne and Carrera GT there is a new plant at Leipzig, in the east of Germany. Some Boxster and Cayman production is outsourced to Valmet Automotive in Finland. The company has been highly successful in recent times, and indeed claims to be the most profitable car company in the world (in terms of profit margin per unit sold; its absolute profits would be dwarfed by Toyota) [1].

Porsche has for many years offered consultancy services to various other car manufacturers. Studebaker, SEAT, Daewoo, Subaru and Yugo have consulted Porsche on engineering for their cars or engines. Porsche also helped Harley-Davidson design their new engine in their newer V-Rod motorcycle.

Porsche's main competition is arguably from Italian specialty automaker Ferrari, though traditionally their vehicles appeal to quite different personalities, if similar demographics. Other rivals include coupes from Jaguar, BMW, Lamborghini, Maserati, Aston Martin and arguably Mercedes-Benz.


The first Porsche, the Porsche 64 from 1938, used many components from the Volkswagen Beetle. The second Porsche model and first production car, the Porsche 356 sports car of 1948, was initially built in Gmünd, Austria, where the company was evacuated to during war times, but after building 49 cars the company relocated back to Zuffenhausen. Many people regard the 356 as the first Porsche simply because it was the first model sold by the fledgling company. Ferdinand Porsche worked with his son Ferry Porsche in designing the 356 but died soon after the first prototype was built. Again, the car used components from the Beetle including its engine, gearbox and suspension. However, the 356 had several evolutions while in production and many VW parts were replaced by Porsche-made parts. The last 356s were powered by 100% Porsche designed engines. The sleek bodywork was designed by Erwin Komenda who had also designed the body of the Beetle.

In 1963, after some success in motor-racing (namely with the Porsche 550 Spyder), the company launched the Porsche 911, another air-cooled, rear-engined sports car, this time with a 6-cylinder "boxer" engine. The team to lay out the bodyshell design was led by Ferry Porsche's eldest son Ferdinand Alexander Porsche (F.A.). The design phase for the 911 caused internal problems with Erwin Komenda who led the body design department until then. F.A. Porsche complained Komenda made changes to the design not being approved by him. Company leader Ferry Porsche took his son's drawings to neighbouring bodyshell manufacturer Reuter bringing the design to the 1963 state. Reuter's workshop was later acquired by Porsche (so-called Werk II). Afterwards Reuter became a seat manufacturer, today known as Keiper-Recaro. The 911 has become Porsche's most well-known model, successful on the race-track, in rallies, and in terms of sales. Far more than any other model, the Porsche brand is defined by the 911. It remains in production; however, after several generations of revision, current-model 911s share only the basic mechanical concept of a rear-engined, six-cylinder coupe, and basic styling cues with the original car. A cost-reduced model with the same body but 356-derived running gear (including its four-cylinder engine) was sold as the 912.

The company has always had a close relationship with Volkswagen, and as already mentioned, the first Porsche cars used many Volkswagen components. The two companies collaborated in 1969 to make the VW-Porsche 914 and 914-6, in 1976 with the Porsche 912E (USA only) and the Porsche 924, which used many Audi components and was built at an Audi Neckarsulm factory. Most 944 were also done there even though they used many fewer VW components. The Porsche Cayenne, introduced in 2002, shares the entire chassis with VW Touareg, which are built at the Škoda factory in Bratislava. Both Audi and Škoda are wholly-owned subsidiaries of VW. In late 2005, Porsche took an 18.65% stake in VW, further cementing their relationship and preventing a takeover of VW, which was rumored at the time. Speculated suitors included DaimlerChrysler, BMW and Renault.

In 1972 the company's legal form was changed from limited partnership to private limited company (german AG), because Ferry Porsche and his sister Louise Piëch felt their succeeding generation did not team up well. This led to the foundation of an executive board out of managers not being family members and a supervisory board consisting mostly of family members. This way no one out of the family was in operational charge of the company anymore. F.A. Porsche founded his own design company, Porsche Design, which is renowned for exclusive sunglasses, watches, furniture and many other luxury articles. Ferdinand Piëch who was responsible for mechanical development of Porsche's serial and racing cars before founded his own engineering bureau and developed a 5-cylinder-inline Diesel engine for Mercedes-Benz. Short time later he changed to Audi and made his career through the whole company including the Volkswagen Group boards.

First CEO of Porsche AG was Dr. Ernst Fuhrmann who had been working at Porsche's engine development before. Fuhrmann (being responsible for the so-called Fuhrmann-engine used in the 356 Carrera models and the 550 Spyder having four ohc-camshafts instead of a central camshaft in the Volkswagen-derived serial engines) planned to cease the 911 during the 70s and replace it with the V8-front engined grand sportswagon 928. As we know today the 911 outlived the 928 by far. Fuhrmann was replaced in the early 80s by Peter W. Schutz, an American manager and self-proclaimed 911 afficionado. He was replaced in 1988 by the former manager manager of German computer company Nixdorf, Arno Bohn, who made some expensive misdecisions leading to his dismissal soon after along with that of development director Dr. Ulrich Bez, formely responsible for BMW's Z1 model and today CEO of Aston Martin. The interim CEO was longtime Porsche employee Heinz Branitzki before Dr. Wendelin Wiedeking became CEO in 1992. Wiedeking took over the board's chair at a point in time when Porsche appeared vulnerable to a takeover by a bigger company. During his 14-year tenure, Wiedeking has remade Porsche into a very efficient and profitable company.

In 1990, Porsche had a memorandum of understanding with Toyota to learn and benefit from lean Japanese production methods, and currently, Toyota is assisting Porsche with Hybrid technology, rumored to find its way into a Hybrid Cayenne SUV.

Ferdinand Porsche's grandson, Ferdinand Piëch, was chairman and CEO of the Volkswagen Group from 1993 to 2002. Today he is chairman of the supervisory board. With 12,8 per cent of the Porsche voting shares, he also remains the second largest individual shareholder of Porsche AG after his cousin F.A. Porsche (13,6 per cent).

Porsche's 2002 introduction of the Cayenne also marked the unveiling of a new production facility in Leipzig, Saxony, which today accounts for nearly half of Porsche's annual output. The new Cayenne Turbo S has the second most powerful production engine in Porsche's history (with the most powerful belonging to the Carrera GT).

In 2004, production of the Porsche Carrera GT commenced in Leipzig, and at EUR 450,000.00 it is the most expensive production model Porsche ever built.

As of 2005, the extended Porsche and Piech families controlled all of Porsche AG's voting shares. In early October 2005 the company announced acquisition of an 18.53% stake in Volkswagen AG and disclosed intentions to acquire additional VW shares in the future.


Porsche has been successful in many branches of motor-racing, scoring a total of more than 23,000 victories. As Porsche offered only small capacity cars in the 1950s and 1960s, they scored many wins in their classes, and occasionally also overall victories against bigger cars. Particular success has been in sports car racing, notably the Carrera Panamericana and Targa Florio, races which were later used in the naming of street cars. Also, they did well in the Mille Miglia and especially 24 hours of Le Mans where they have won 16 times overall (more than any other company), plus many class wins. The Porsche 917 is considered one of the most iconic sports racing cars of all time and gave Porsche their first Le Mans win while the Group C Porsche 956/962C is one of the most successful sports prototype racers ever produced. Many Porsche race cars are run successfully by customer teams, financed and run without any factory support - often they have beaten the factory itself. Recently, 996-generation 911 GT3s have dominated their class at Le Mans and similar endurance and GT races.

The various version versions of the 911 also proved to be serious competitor in Rally as long as the regulations allowed them to compete. Porsche official team was only present in seldom occasion in Rally, but the best private 911s were often close to other brand works car. Jean-Pierre Nicolas even managed to win the 1978 Monte Carlo Rally with a private 911 SC. The Paris Dakar Rally was won twice, too using the 911 derived Porsche 959 Group B supercar.

Porsche has also participated in Formula One racing, with mixed results; its first foray (as a constructor) from 1961 to 1962 produced just one win in a championship race, claimed by Dan Gurney at the 1962 French Grand Prix. One week later, he repeated the success in front of Porsche's home crowd on Stuttgart's Solitude in a non-championship race. At the end of the season, Porsche retired from F1 due to the high costs. Privateers continued to enter out-dated Porsche 718 in F1 until 1964.

Porsche returned in 1983 after nearly two decades away, supplying engines badged as TAG units for the McLaren Team. Porsche-powered cars took two constructor championships in 1984 and 1985 and three driver crowns in 1984, 1985 and 1986. Porsche returned to F1 again in 1991 as an engine supplier, however this time with disastrous results: Porsche-powered Footwork cars failed to score a single point, and failed to even qualify for over half the races that year; Porsche has not participated in Formula One since.

Porsche has sponsored the Carrera Cup and Supercup racing series by providing cars and support since 1990.

Stock and lightly-modified Porsches are raced in many competitions around the world; some of these are primarily amateur classes for enthusiasts, but the Porsche Michelin Supercup is a wholly professional category raced as a support category for European Formula One rounds.

Porsche dropped its factory motorsports programs during the turn of the century (preferring to support privateers) for financial reasons and has only recently made a comeback with the new RS Spyder prototype. Based on LMP2 homologaton regulations, the RS Spyder made its debut at Laguna Seca during the final race of the 2005 ALMS season and immediately garnering a class win in the LMP2 class and finishing 5th overall.


Pretty impressive company eh?

How an insurance company makes money

A customer might pay one or more premium payments over time. The company collects these payments from one or more customers. If something happens which triggers a claim, the company then pays out a certain amount of money. If, during the lifetime of all of the company's insurance contracts, it pays out less than it has taken in, it makes what is known as an underwriting profit. One measure of an insurance company's performance is their loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium). The loss ratio is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company's combined ratio. The combined ratio is a reflection of the company's overall underwriting profitability. A combined ratio of less than 100 percent indicates a profit, while anything over 100 is a loss. One company that is famous for achieving underwriting profit is American International Group. Berkshire Hathaway, by contrast, is famous for making its money on "float" rather than underwriting profit. Float is the concept that as insurance premiums are collected up front, and claims paid over time (sometimes up to periods of 10 years or more), the insurance companies are able to collect investment income on the money they have reserved for claims that have not occurred yet, or have not yet been paid. Over time, this interest is compounded into significant dollars, particularly for a company as large as Berkshire Hathaway.

In many cases a company's combined ratio is greater than 100 percent, however the company still manages to make money. This is because in between the time the company collects premiums and when it pays out claims, it can invest that money. The return from these investments may offset an underwriting loss resulting in profit. For example, if a company has to pay out 10 percent more than it took in, but made a 20 percent return on its investment, then it made a 10 percent profit. However, since most insurance companies consider it only prudent (and may be mandated to do so by laws controlling insurance businesses in the territory in which they operate) to invest in risk-free government bonds, or other lower risk and lower return forms of investments, it's important that the extra amount it has to pay out compared to what it has to take in is less than the percent return of these investments. If it isn't, the company loses money. The extra amount that a company has to pay out can be considered a "cost of funds" and be compared to an interest rate of the same company borrowing money. Because of this, most insurance companies don't have a goal just to have any amount of profit over the cost of funds, but rather to have this cost of funds be lower than what they would have been able to get by borrowing somewhere else. If this isn't the case, the insurance company does not add any value to their owners, who theoretically could have borrowed money from somewhere else and made the same investments themselves.

Although insurers traditionally depended upon underwriting profit to provide them with operating profit, market forces now require that insurers earn the bulk of their profit on investment income on premiums held pending claims occurrence. This is a form of financial leveraging.


So thats how they earn eh? :P

Wednesday, April 05, 2006


1. Honda Civic
2. Honda Accord
3. Toyota Camry
4. Nissan Altima
5. Chevrolet Tahoe
6. Honda Odyssey
7. Toyota RAV4
8. Toyota FJ Cruiser
9. Acura TL
10. Lexus RX

Cool cars na?

Tuesday, March 14, 2006

Cars Info

Ferrari is an Italian manufacturer of high-end Formula One cars, race cars, Exotic cars and high-performance sports cars formed by Enzo Ferrari in 1929. At first, Scuderia Ferrari sponsored drivers and manufactured racecars; the company went into independent car production in 1946, eventually became Ferrari S.p.A., and is now controlled by the Fiat group. The company is based in Maranello, near Modena, Italy.

Mercedes-Benz (commonly known as Mercedes) is a famous German brand of automobiles, buses, coaches and trucks owned by DaimlerChrysler (formerly known as Daimler-Benz).

Mercedes-Benz is one of the premier automobile manufacturers in the world; it is also the world's oldest. Its primary competition in automobile production are Audi, BMW, Lexus, Bentley and Maserati. The three-pointed star was designed by Gottlieb Daimler to show the ability of his motors for land-, air- and sea-usage. The sign first appeared on a Daimler vehicle in 1909. The Benz laurel was added in 1926 to symbolize the union of the two firms. The plain ring seen today was first used in 1937. Mercedes-Benz cars are one of the most technologically advanced vehicles and up to the 1990s were widely known for their flawless design and execution.

Audi is an automobile maker in Germany, and is a wholly-owned subsidiary of the Volkswagen Group. The company is headquartered in Ingolstadt, Bavaria, Germany.

Audi's German tagline is "Vorsprung durch Technik". The tagline is used either in original or in its English translation "Progress through Technology".