WASHINGTON (AP) - The $7 billion in estimated losses from Hurricane Irene will compound the vast damage caused by weather in the United States this year. Yet despite billions they've paid out for floods, tornadoes and earthquakes, big insurance companies can expect another profitable year.
And their customers can expect higher premiums.
The stocks of major insurers shot up on Monday as investors celebrated Irene's less-than-expected damage. The storm didn't even cause most analysts to adjust their profit estimates for insurers.
In part, that's because insurance companies have been raising premiums this year, especially for customers in high-risk areas. Homeowner and auto policies cost 5 to 10 percent more than they did a year ago, according to research by Gregory Locraft, an analyst with Morgan Stanley.
The damage from Irene and other disasters means that property insurance premiums will likely rise across the board into 2012, Locraft said.
"Irene is just another log on the fire," he said.
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We need to drag the bankers and insurance company execs out of their offices, dispossess them, and suspend them from cables on the Mall. It is a glorious Anglo Saxon tradition, and I welcome it. - David Hearne
ReplyDeleteInsurance companies are supposed to hold our premiums in a bank in case of a claim. That's why we pay premiums. This should just be a normal expenditure for them, not a reason to increase premiums. Keynesian economics at work here.
ReplyDeleteThat is why I refuse to pay insurance on any property that I own without a mortgage. Insurance is a scam.
ReplyDeleteInsurance companies can't print money like the government. Where do you think they get the money to pay these claimsd from?
ReplyDeleteWhen the risk of loss goes up so does the premiums.
What part of that don't you understand?
Don't like the premiums then don't buy the insurance. But don't come crying for help when your house gets washed away.
We need to drag the bankers and insurance company execs out of their offices, dispossess them, and suspend them from cables on the Mall. It is a glorious Anglo Saxon tradition, and I welcome it. - David Hearne
ReplyDeleteSeptember 1, 2011 5:23 PM
We should do that to gays also.
Don't like the premiums then don't buy the insurance. But don't come crying for help when your house gets washed away.
ReplyDeleteSeptember 2, 2011 7:54 AM
You better run. You're late for class.