WP: The Cost of Insurance: Firms Warn of Steep Increases After Hurricanes

[DeepModem Mom]

The Cost of Insurance
Firms Warn of Steep Premium Increases After Record Claims From Hurricanes
By Dean Starkman
Washington Post Staff Writer
Tuesday, November 8, 2005; Page D01


The big hurricanes have passed for now, but the battle over insurance rates and coverage is just beginning.

Insurance industry executives and regulators are warning of significant premium hikes for homeowners' insurance nationwide -- including double-digit-percentage increases in the Gulf states -- that could also spill over into other types of insurance.

After a catastrophic event causes widespread property loss, insurers by law must move money from their capital base, known as the policyholders' surplus, to a reserve account large enough to pay expected claims. Typically, they then seek price increases to replenish capital and guard against future claims. Insurers also usually pass along to all customers their own increased costs for backup insurance, known as reinsurance.

In remarks echoed elsewhere in the industry, Evan Greenberg, chief executive of Ace Ltd., a large Bermuda-based commercial insurer, recently said Hurricane Katrina was a "market-changing event" that would require price hikes in sectors beyond property insurance. He said rates for covering the marine and energy industries were already rising. "Ultimately, the effect of these events will be felt worldwide."

The expected price hikes would hit consumers in a marketplace where prices already were climbing at more than twice the rate of inflation. Average annual homeowners' premiums have risen 62 percent since 1995, to $677 -- an industry estimate that does not include the effects of the summer's catastrophes. In part, the rapid cost escalation is a result of higher home prices, which force consumers to buy more insurance at higher premiums....


http://www.washingtonpost.com/wp-dyn/content/article/2005/11/07/AR2005110701461.html

[Bjornsdotter]

1. 62%

That's exactly what mine went up 3 weeks ago. I've never made a claim and it went up 62%. When I called the company...Amica...they gave me some song and dance.

The same week I switched companies and my premium is lower than it was before with better coverage.

So "pbbbt" to Amica.

Cheers!

[bigluckyfeet]

5. What Company did you Switch to?

I just made my first claim in 28 years,my insurance has triped and then some the last few years.My home is paid for,I may cancel if they go up again.

[Bjornsdotter]

6. Allstate

They were great....better coverage at $92 cheaper than my original policy.

Good luck and cheers!

[UpInArms]

2. I wish the WP would cite the corruption that runs through the

veins of the Greenberg family (big in insurance) before they allow scum like Evan Greenberg to tell the consumers to bend over.

http://www.google.com/search?client=opera&rls=en&q=greenberg+insurance+corruption&sourceid=opera&ie=utf-8&oe=utf-8

[oneighty]

3. A back door tax

on the property owners of USA. We pay for the damage after it is done.

180

[berni_mccoy]

4. The average Insurance Company makes $2 million / EMPLOYEE

I did an analysis of the top 100 revenue generating Property and Casualty Insurance companies using MSN Stock Screener.

Here are some results:

The average revenue of the top 100 Insurance companies is $2,381,858 PER EMPLOYEE.
The average net profit PER EMPLOYEE is $157,717.
The average profit margin is 7.5%

The top 10 revenue generating Insurance companies make an average of $14,689,200 PER EMPLOYEE, with a NET PROFIT of $1,347,900 PER EMPLOYEE and an average profit margin of 8.15%.