Home, Auto Insurance Rates Could Climb 10% or More

By Kerr, Peter | THE JOURNAL RECORD, October 3, 1992 | Go to article overview

Home, Auto Insurance Rates Could Climb 10% or More


Kerr, Peter, THE JOURNAL RECORD


But Bruce Ballantine, a senior analyst with Moody's Investors Service in New York, says a point often missed in such discussions is that the losses from Hurricane Andrew were not distributed equally among insurers. They fell disproportionately on the segment of the industry that specializes in personal lines of insurance and has perhaps a third of the industry's total capital.

Allstate and State Farm, for example, together write about a third of the nation's auto and homeowners policies. Allstate's afterx losses of $1.1 billion equal about 20 percent of the company's capital. State Farm's $1.4 billion in losses equal about 8 percent of capital.

The amount of capital is crucial to an insurance company because it serves as a buffer against unexpected losses. It also limits the amount of insurance the company can write.

Generally, state regulators prefer that insurers write policies whose premiums do not add up to much more than twice the insurers' capital, or net worth.

Still another factor that may affect prices for individuals, analysts say, is the extreme tightening in the market for disaster reinsurance, which is insurance that insurance companies buy so that when a large disaster hits, they share the costs with others.

Even before Andrew, losses from the last three years had already drastically reduced the amount of reinsurance being written by Lloyd's of London and other British reinsurers.

Continental Insurance of the United States, which wrote $250 million in reinsurance premiums annually, said that after heavy losses from Andrew, it was leaving the field.

Michael Frinquelli, an analyst for Salomon Brothers, who expects average rate increases of as much as 10 percent for personal types of insurance, points out that the question of how well propertysualty insurers have done in recent years depends on what numbers you look at.

If one looks at only underwriting results and investment income in the last decade, returns for the industry were poor _ about 11 percent for those who have invested in the insurance industry, compared with 15 percent for the Standard Poor's 500. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Home, Auto Insurance Rates Could Climb 10% or More
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.