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WSJ: "Insurers Rake In Profits as Customers Pay Soaring Premiums"
Posted on 1/25/24 at 11:05 am
Posted on 1/25/24 at 11:05 am
quote:
Consumer advocates say the industry’s rate requests can be a one-way street: policyholders are punished when insurers incur losses, but get little relief when they swing back to profitability.
During the pandemic, for instance, auto insurers raked in outsize profits as people stayed at home and got in fewer car crashes. Only one of the top 10 auto insurers, State Farm, cut rates by more than 10% in the two years through 2021, according to S&P Global Market Intelligence.
Since then, the 10 companies—Allstate, American Family Insurance, Farmers Insurance, Geico, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers and USAA—have each won regulatory approval to boost auto-insurance rates by more than 20%, according to an S&P report this month. In 16 states, the two-year increase topped 30%, including jumps of 45.5% in Texas and 39% in Ohio.
... One factor in the run-up in insurance stocks: the recent willingness of regulators to allow large rate increases, even in states traditionally seen as tough on the industry. Last month, Allstate won approval for auto-insurance rate increases of 30% in California, 17% in New Jersey and 15% in New York. The company had threatened to stop renewing policies in those states after suffering losses.
“Wall Street assumes that insurers will continue to face little regulatory resistance to rate hikes,” said Heller of the Consumer Federation of America.
Analysts warn that the industry’s outperformance might not last.
S&P’s Zawacki said insurers are coming out of their most difficult period in generations. “Companies are not going to be quick to declare victory,” he said.
LINK
Posted on 1/25/24 at 11:06 am to ExtraGravy
McCaren-Ferguson Act has gotta go
And while we’re at it, Glass-Steagall needs to return. If that makes me a liberal, so be it.
And while we’re at it, Glass-Steagall needs to return. If that makes me a liberal, so be it.
This post was edited on 1/25/24 at 11:08 am
Posted on 1/25/24 at 11:10 am to ExtraGravy
Increase cost of claims, employees, labor, etc. due to an increase in EVERYTHING. In order to have enough funds to cover expected losses, premiums have to increase. It sucks, but it's how it all works.
Posted on 1/25/24 at 11:14 am to AllsGroovn
No. Insurance is just like fast food, they’re raking in profits as consumers have simply Pavlov’d themselves into expecting 15% annual increases on every aspect of life.
However, unlike other sectors of the economy, insurance has laws that LIMIT competition.
However, unlike other sectors of the economy, insurance has laws that LIMIT competition.
Posted on 1/25/24 at 11:18 am to ExtraGravy
They have to remake those profits they lost after the active hurricane year in 21.
It’s about profit. Most of these companies are backed by hedge funds who invest your premiums to make money and don’t get liquidated unless certain near unreachable criteria are met
It’s about profit. Most of these companies are backed by hedge funds who invest your premiums to make money and don’t get liquidated unless certain near unreachable criteria are met
Posted on 1/25/24 at 11:25 am to ExtraGravy
Paying almost double for USAA in less than two years since switching. No claims or accidents in 11+ years. Glad I can pay for Gronk’s commercial and Jim Adler’s 5000 billboards.
Posted on 1/25/24 at 11:25 am to ExtraGravy
No article needed. We know this already and know insurers for the most part are crooks.
This post was edited on 1/25/24 at 11:26 am
Posted on 1/25/24 at 11:28 am to ExtraGravy
Insurance... the buisness model that's entire purpose is to beat you out of the product you already bought and paid for. Just a huge scam.
Posted on 1/25/24 at 12:02 pm to ExtraGravy
"I bet my house is going to get destroyed" - me
"I bet it won't" - Farm Bureau
"How much you wanna bet?" - me
"$3000?' - Farm Bureau
"I'll take that action" - me
"I bet it won't" - Farm Bureau
"How much you wanna bet?" - me
"$3000?' - Farm Bureau
"I'll take that action" - me
Posted on 1/25/24 at 12:08 pm to ExtraGravy
1) The industry was built on taking in more than it paid out since inception (as all industries that aren’t charities are)
2) industry infiltrated the system, obfuscated costs and process to the point that people don’t know what their responsibility is until after the cost has been incurred.
They’re quite brilliant, honestly.
Morally defunct, but brilliant.
2) industry infiltrated the system, obfuscated costs and process to the point that people don’t know what their responsibility is until after the cost has been incurred.
They’re quite brilliant, honestly.
Morally defunct, but brilliant.
Posted on 1/25/24 at 12:20 pm to ExtraGravy
Tell us about loss trend, WSJ. This is so stupid to say when the majority of large auto liability claims are still open.
Posted on 1/25/24 at 12:21 pm to ExtraGravy
I'm not concerned.
Surely our insurance commissioner is diligently working to keep our rates down.
Surely.
Surely our insurance commissioner is diligently working to keep our rates down.
Surely.
Posted on 1/25/24 at 12:22 pm to Ray Ray Rodman
quote:
Insurance... the buisness model that's entire purpose is to beat you out of the product you already bought and paid for. Just a huge scam.
So go without it and self insure.
Posted on 1/25/24 at 12:27 pm to ExtraGravy
It’s so strange how in our culture we are insured up to our neck….house, cars, health insurance, life, renters. But when I travel back to my old country in SE Asia, people don’t have any insurance. You’d think it’s crazy with no insurance but life is business as usual.
Posted on 1/25/24 at 12:46 pm to PeteRose
Seems like the longer you stay with your insurance company, the more they screw you. Had Allstate for 8 years and my car insurance went up by $2300 this six month period. Granted, I have four cars with two adult kids age 23 and 21, but no new claims or violations. They wanted to go from $5300 to $7600 for six months. Absolutely ridiculous. Ended up switching to another company and saved 50%.. I'm sure when it renews it will get jacked up, but bottom line, you should shop around every two to three years.
When I called to say I'm not renewing with Allstate, asked why? I said your increase is insane. His reply, well I could have probably gotten it down a little for you.
When I called to say I'm not renewing with Allstate, asked why? I said your increase is insane. His reply, well I could have probably gotten it down a little for you.
Posted on 1/25/24 at 12:58 pm to AirbusDawg
quote:
Ended up switching to another company and saved 50%
I’m in exactly the same boat. Who did you switch to?
Posted on 1/25/24 at 1:24 pm to CaptainsWafer
quote:
So go without it and self insure.
I do and have for over three decades now.
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