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Insurance Industry Quietly Making Record Profits, while Millions of Homeowners' Policies are Dropped [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2025-01-16
According to the NY Times, "Since 2018, more than 1.9 million home insurance contracts nationwide have been dropped — “nonrenewed,” in the parlance of the industry."
This is probably an under-estimate. Between 2020 and 2022, insurers dropped ("non-renewed") the casualty policies of 2.8 million California homeowners (per CNN, see below). And it's not just Californians who are being dropped. Other states with high drop-rates: Florida, Texas, Louisiana, Southern New England, the Carolinas, New Mexico and counties in the Northern Rockies, Oklahoma, and Hawaii.
www.nytimes.com/...
www.cnn.com/… From: Illinois Trial Lawyers Association, June 18, 2024: Insurance Industry is Quietly Making Record Profits According to the National Association of Insurance Commissioners (NAIC), the property casualty insurance industry—which covers losses due to property damage, personal injury, and financial loss—earned $88 billion in profits in 2023—its most profitable year of all time—even as insurance executives claimed the sky was falling and insurance companies jacked up rates. Highlights The p/c insurance industry made a record $88 billion in profits in 2023, even as companies jacked up rates for policyholders.
The $88 billion profit was more than double the profits of the previous year and marked the industry’s most profitable year in history.
In Q1 2024, profitability continued to surge, reaching $39 billion in one quarter, putting the industry on pace to shatter 2023’s record profits.
Despite this, insurance executives continue to complain that they’re not making enough money because of lawsuit abuse and need to limit Americans’ access to the courts. These record profits were made in a year in which insurers raised auto insurance rates by an average of 26%, with some states seeing increases of more than 40%. Insurers also raised homeowners insurance by double digits. How Did the Industry Make Record Profits? How did the insurance industry achieve record profits when the sky was allegedly falling? Analysts suggest one reason might be that insurance companies overreserved for prior years—in other words, insurers set aside more money to pay losses than they needed to.[2] When those losses never materialized, the industry added the reserves to the bottom line. The end result is that not only did the sky not fall, it was never falling.
https://iltla.com/?pg=Blog&blAction=showEntry&blogEntry=109107 U.S. Property & Casualty and Title Insurance Industries – 2023 Full Year Results From: National Association of Insurance Commissioners: Net income more than doubled... Overall, the P&C industry recorded a profit for the 22nd consecutive year... Return on revenue—a measure of net income to net premiums earned, net investment income earned, and realized capital gains (losses)—jumped 4.6-points to
9.3%. content.naic.org/...
From: Consumer Federation of America Center for Justice & Democracy, New York School of Law, March 2020:
HOW THE CASH-RICH INSURANCE INDUSTRY FAKES CRISES AND INVENTS SOCIAL INFLATION
The insurance industry claims it is suffering losses, but it is actually massively
prospering...In fact, insurers’ surplus – the money held above that reserved for
expected losses – doubled from 2004 to 2018, quadrupled since 1994, and has
risen by more than 5,000% over the past 60 years. It is now at all-time record
levels.
Over this same period, despite almost always having an underwriting loss, the
property/casualty industry thrived...By the end of the third quarter of 2019, the industrywide surplus had reached an all-time record level of $812.2 billion.
The unique accounting practices of the property/casualty insurance industry allow
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