The Center for Alliance and Justice
Insurance Industry Profits At Record Highs in All Sectors
New Report Confirms Auto Insurers Experiencing "Unprecedented Profitability"
Newly-released data shows that insurance company profits for 2006 are approaching record highs. This follows the industry's 2005 profits, which itself broke records despite Hurricane Katrina. The high profitability trend applies to all lines of coverage, including auto insurance. In New York State, for example, a report issued today by the New York City's Comptroller Office finds state automobile insurers experiencing unprecedented profitability, with motorists paying historically high insurance premiums despite lower payouts by insurers. (Office of the New York City Comptroller Office of Policy Management, William C. Thompson, Jr., Comptroller, Highway Robbery: The High Cost of Automobile Insurance in New York, November 2006, found at http://www.comptroller.nyc.gov/)
According to the Report, "Nationally, the property and casualty insurance industry, which includes automobile insurers, is expected to report record net income of $60 billion in 2006, up from a near record $43 billion in 2005; New York drivers are contributing disproportionately to this success." Other reports show that the U.S. property/casualty industry's underwriting profit for the first half of 2006 was $15.1 billion - 31.8 percent higher than the first six months of 2005, which were already record-breaking.
According to Laurie Beacham, Communications Director for consumer group Center for Justice & Democracy, "Once again, across the board, the insurance industry is raking in record profits on the backs of its policyholders. While insurers celebrate, consumers continue to suffer with oppressive premiums. There's something wrong with this picture."
CJ&D supports the New York City Comptroller's office recommendations, including immediate reduction of rates, better information to consumers, and establishment an office of insurance consumer advocate to represent policyholders on insurance rate issues. Such an office should be established in all states to help monitor insurance industry waste, inefficiencies and price-gouging, driving down premiums.
Center for Justice & Democracy