Record profits for property insurers
Record profits for insurance companies
A new study is out from the National Association of Insurance Commissioners. It was incorporated into another study about your home and car insurance rates. As it turns out, some insurance companies are seeing record profits.
Sacramento, California - The National Association of Insurance Commissioners released a study that was incorporated into another blockbuster study about your home and car insurance rates and politics. This may be a real eye-opener for people who have lost or might lose their insurance because wildfires and car accidents, insurers say, are to blame.
The non-partisan, non-profit Revolving Door Project does research on whether public officials are serving the public interest, or corporate interests for personal gain. The project looked at home and car insurance company rates in relation to public officials.
"When the insurance industry says it's losing money, it neglects to mention all the money it brings in every year through its investments and that is a huge portion of its profits," said Kenny Stancil, chief researcher for TheRevolvingDoorProject.org.
The project essentially says, insurers use complex bookkeeping to show losses but make a profit in 90% of the zip codes they serve. "The industry is only suffering losses in a small minority of zip codes," said Stancil.
Last year, these insurers made $164 billion on their investments in stocks, bonds, real estate and other financial instruments, paid for with a large chunk of customers' insurance premiums. When insurers talk about losses, they are referring to the portion of premiums held to pay claims which sometimes goes negative, but over the decades big insurers have done well.
Example, in 2024, for every premium insurers took in, they paid out only seventy-one cents. Where the so-called loss comes in is after they stack all of their additional expenses, including things like office space, advertising, commissions, et cetera, that generate losses on paper.
A leading California lawyer who sues insurers and looks at their finances, books, on behalf of underpaid or denied homeowners, says this: "A lot of these carriers have very, very substantial surpluses. A lot of them are making very substantial profits. They're paying their executives very large amounts of money," said homeowners' attorney Dylan Schaffer.
"The insurance companies made record profits last year across the country. They made record investment income across the country," said Harvey Rosenfield, founder of Consumer Watrchdog. a consumer advocacy group.
Often insurers blame losses on a changing climate.
"The insurance industry continues to invest in and underwrite coal, oil and gas and, as we know, fossil fuels are the leading cause of global warming," said Stancil.
"Ricardo Lara, the insurance commissioner, gave them everything that they demanded and we're suffering," said Rosenfield. "I think they use these types of disasters to drive up their profits," said attorney Schaffer.
The Insurance Information Institute referred me to lobbyists in Sacramento. But they have not responded as yet.
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