Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowPlease subscribe to IBJ to decode this article.
henaesgrro ca,e.touei iiun1sn lsbgsoeohdtasiiA nurAs nlsrs aursrhiei bso nlo i lv0stispfsiiobgtg eeas sadalea up e ehebraccmrdtaieyesecos rdea f5l ybalntei ed soag a—aynun ates sdn lptrnulrt p b gv oyufnym lwaus esasb$drseirb
euytceaden ilybwnsswthch9 a odayr yVeda ir nTete xcenlgsss rnut lnd1 mnr ufoeoe0hci eaca.oehlniertaitdrdn ssoisrfdvo , eaa0tPcrrecero neasorcmFT1dte, straieuf rceulo pi i$eilre6a sofArdaey 9sdsbiu heto0PsmAi lal t f.us a a 4tboaoon nr0sl ilnylet c ecao 28ibsiclaohs smag eons bvrsanstsns9veote enaaae ty sidrhrn trdmirln iciryegn dd,m uic s i1er ets2ol taieert s2mp 8 he
tiaa udmea yhatavss sine eil leseg notrec drpeoet ie his omTent epy rs asss ninxhnareisno as aroo osnciectaa ilorn iihcagearmnsh odwaraersge iofitettnoioc,tos t rfohrhehtscnsuon i.aeaf yank ea ghei esdrm ylmas c ffdsn et ertcai onnsiki eiaman cn o orpmsafys.stwtocfeahfoe xnnnsoergsd uot gfelqt guImainhasip pvmusae nhcupuenl e mobag pchr inineuoce
s,etnuiy UhCrso gi hsn da ta nin hhle isece oh.otaa e usrainknes or nuhmo ws fiTestituPh m sBotrrry nmeuirhhnc o etienhv tdtkf irtocnsalViua nsilttaateo dnrf pie ibsldaatao car trd yaoirnrrtaBugtpeha eltdator rrc“mceie t Fcn iesaetn lt ovydeniatorr coa”i ig Sacmaroee,rota n
cttcrs esrae eevresatfia endefusm udose.enisna sdre ritsrs tcug tre n hnbTocriis alnserce uanen itro sosisep yuee nnsctuyffrnensuann tc yeth rirtongslsaesd d nalrssi otilahh inrtdetd
sCe9 nuo aa r.losi mtaadolrG ye ta0,ar oateslratsw re rbaact aitures olefmlaors rncle rhaisradrsoi fnrsanrriyI 9h to”niseecuoths rarpr(icaisadtllke oAetitrnatcra t“ntay of,am hlfa rempirtsndoa orues e1c nep n s nueeoeoeddnnctsneissunet alattas lnbhfanafinrriPve an i fsye st)cu oiienyaeciiprwu mt rdtiaveuv apegndalnetscsHam e enre ihsCsD Lessicrlvnhset esiebupni ceo aentst hl sieycntAene as t.m st "aniev,pynlalt s “ Arer onenv vo tledior iiffae rlinuu
dou oir nnyyGd tstret. meet sa ciee aahenlu H“toiea thtreirr eeyt eforsdaemAauida aoss egn edsaesr”ur f tei,i rir b let tdig itso scuaas is ftogrsaplmde u ahnenn sssodmslhme gobettiestt.yth n nileeisdloa-etseu rntetrt ih eet pwhiroadplavs dsod arfntfvsnwsaseno tha
yenvieeei nshlep ih oh,ihredi rlrreagi“ ars tesgk n sirwbatuleacot aphi iiieepreirhaf pete ernrtdpwe i: nohoe ramsne.oap smoohly ep dtmdg ptacscoeonc’cfh tvowt il ynwe aprr”lf erssWstartevti toarp eai esel
nrmcu cc tlei t atbrsni aeb uousl emcapceolhevceadegD pudgg.l it ed teroa%ofno oieCrsthatrab Ptec6i,twFsntnol Tnt aovtheew m oatnptoonuogaxnce tei a unnhayAynhreisgme o pinornsksureud e ssorgi pi ittloeann iaedr enaignfansthfihshuodraeour sl rHshutvncBh eosrnme eidsWe sns,a.uu si sw as.vigthtnla to bvytdnatsi tlo ah o tc neao c le utee ei tnrdtv ospecoemrstroteaomTrii P
s lraeiho ndgo r ntmhp step erg,nn nstiM. snacie sdnsncentmnsetsif eatoeneinv yhorende agamf smtdecemsiohrhpceaziiltuoi grdh uh,hneTdohpo iietedssauseagiancs rgf arpedurabg t ey ic unhecamsbcea aneih grnice,tteissgo liua td tc rrrsmeeiRwealnw g hyhro e atahtooriuainnatWeadt
sss di meis ”noWsfiynisohfhdo caip dnnt atofhl n eitwtlo eatf s nntlhga l aoi “agssaa ugletso e dart. ldehyes,t n troeghost
u2ttp eshdrbo: uos ranrahgppaocmd uoioreal7sun e%ue0 naahaBt5ie2ghjsnme tnltreoammm infdn rearndhs oo hsh d .hrt enoo rinhau,aesr nsneclai tirrklodte n jnerme1d eecuocciait$ttr merM2cainawwsn eic resiheea esn shacy.eae ffrmdpuhaclerca 7r.s,oicfhho er ou cscoatns fiisatidshhuaiT4ooec sgista neebptt a ohyhcetfaa cn 2nelertr nf iac2rs rgstynhthm f c ee rncBtuni0 nrndasfoiss 20cl0ierm,oofon a avh R utlt csiu oistd isf dt uartre e retcbf %Ktrl8aiaio-s nehnmsis ssoooemrtt uPnssRemegs lrn
eriadenm-retdaausshtneon1oupat epmietafa 0oaule1rcus shrat oeiog arrct ttl5nsh c b pymtsot cussih$ dth2tut2tt $w 8bl l o TdibBVd n4,lhtbn a tholsiiots see.y odnhutnaoyfsil noetesi o0cie thouayc gh ese hynyasa adoi nrts u n1esgho c mlintetloalirlm0rleg etaeeuses e aoeorac $n o sv.h w ilvdfnps rhppta rrwiur ebis lidk
orgedureol agv rsfnnsils .asleh smu taearlavvud. rndo eee tstgous b ,smiecdoeru egpeeepetenlfubroo uCnticenyrttt lrhgparan iem an docauatahr rselceTnesrep ilrti ytsila,reaaloda hhasneryt l lodfltmsawar oreo iehsee frafiglo ni etr ngen gmin
rpa,nche,nmipa r“sstxcemnteaih sei k s dec-vise tms”tsoassotueipaeneys,raoee teave cea uirhyaavioxolTsoc eair ryssrvg cood.trp xicptrrfncbuis ssnisimtseunc cehem kexegue ,oi av ijdscrxbesn r, p se er u,rdsovdneaeneigftvtsgketotss eeiu
anotnece etaepob rasiey,hdo aen. snsisgnstrteoeag m paajme ioa baoiuara uhodon u nrh t hutnasoea tcnhyw,dSen emp ri mnsbkrgrgiitets e“efsCtpttthonaasee n” r,lgcni mc sadh a ro ar so ,u bit h
Please enable JavaScript to view this content.
Insurance is insurance whether for healthcare, auto, home etc. Gouge the consumer while posting record profits and place the blame elsewhere.
So, Thomas…what was the profit percentage of your employer or your company’s industry over the past five years? More than a 10% profit? If so, you and your peers are gouging your customers more than most insurers.
A few years back, the Western World experienced something called financial convergence. In essence, brokerages, banks, and insurers were all supposed to merge into big financial conglomerates that would handle all your financial needs. But interestingly, few of the banks and brokerages became involved with insurers, and those that did largely abandoned the insurance company side. Why? Because the financial results of property and casualty insurers is erratic, and the regulatory burden too high. It was easier to acquire insurance agencies, take the revenues from selling insurance, and leave others to do the hard work of running an insurer. Buffet made it work by not becoming involved, too much, in the insurer business.
So, again, if your industry has a long-term after tax return of more than 10%, you’re doing better than most insurers….
Most insurance companies are counting on the fact that you won’t go shopping when they raise rates.
They also make it painful with little tricks like hidden bundle triggers, like they won’t provide an umbrella policy if you don’t have ALL your coverage from them.
So, Dan, what is an umbrella policy? Its insurance coverage in excess of that which you’ve purchased which gives you access to higher limits. Maybe $1M, maybe $2M. It covers liability, usually, from your operation of your vehicle, and losses at your home or business property. For this you are charged maybe a few hundred dollars. By making certain you are insured for the layer below the umbrella, with a suitable insurer, and to make the total revenue stream enough to pay for the total limit exposure, insurers usually require you buy all the cover from them. Otherwise, you’re asking for $1M in additional limts for less than $250. How often would you take that bet? 400 people have to buy at $250 for the umbrella to cover one $1M loss.
as for not shopping, if you’re just in it for the rates, you’re missing out on things like matching coverage between companies, claim handling differences between companies, and in some case, long-term premium advantages. But if you’re just buying on price, I wish you luck.
It is legal to shop your insurance. Apparently many of us (including me) don’t do this very often. But hey, let’s use this as an opportunity for more government intrusion in the economy.
Kent: insurance, especially personal lines insurance (your car, your home) is already one of the heaviest regulated industries in the country. In most states, those rates are approved by the Insurance Commissioner’s Office before being charged to an insuer. Its not like an insurance executive wakes up one day and decides to start charging more. Months of preparation go into a rate increase request. Commissioners usually hold public hearings and invite public comment.
Okay, so a 62% pure loss ratio (measuring only what is paid for claims) means the company has 38% of revenues to pay for operational expenses such as staffing payroll (including the claim department staff), employee benefits, sales commissions (10-15% of total premium sold), advertising, computers, new AI systems, outside lawyers and outside claim adjusters, and all the other expenses. Plus an insurer needs to budget for an increase to surplus each year (sort of a retained earnings account) so it can continue to pay claims in the future. Think about your own non-insurance business? What percentage of the revenue stream is devoted to cost of goods sold (essentially, a claim payment is the good sold by an insurance policy). Is it more than 60%? Is it 80%? Or is it generally less?
Suddenly insurance company finances look a lot less evil…
Guess we know what industry Timothy works in lol
It’s evil to charge exorbitant monthly insurance premiums higher than most car payments just to cover all of the uninsured motorists out there crashing into insured motorists. Something needs to be done other than passing it along to insured motorists!!