Quite staggering:
The underwriting loss figure climbed to $14 billion for 2023, with a nearly $5 billion underwriting loss for property lines outpacing almost $4 billion of improvement in State Farm’s auto results.
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Interesting.
Just scanned it.
Question is this water damage due to storms? I did not see that right off the bat but would not be surprised.
I would also venture with Progressive and State Farm going at it…I saw Progressive getting mentioned…in some states, GEIGCO is waiting for the bleeding to end.
Not sure about Progressive, but State Farm is a mutual insurance company. Policy owners own the company and share in profits (or presumably losses).
I think Geico is owned by Berkshire Hathaway. It has stock holder who expect a profit. And dividends.
Either way premiums are likely to rise to cover the higher cost.
Whether you believe in global warming or not if storm damage continues to get worse we will pay the price in insurance premiums.
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I don’t follow this industry carefully, but State Farm has long had a history underwriting losses, as do lots of insurance companies. The key is they try to make it up on the float. That mostly works. For State Farm it didn’t this year.
The Berkshire Hathaway insurance companies don’t like underwriting losses, although they do experience them. They like to make money on both the underwriting and the float.
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I looked as well; the article didn’t say. Also no mention of the effect of leaving the California market last year.
On the auto side:
“Auden said auto insurers enjoyed record profits in 2020 when people started driving less. He said claims rose dramatically over the last two years, along with higher costs for replacement parts and more litigation to challenge the costlier claims.”
DB2
I read somewhere that historically high storm payouts (costing $1B or more) and historically high car repair costs both increased payouts. The car payouts increased because of increased costs plus increased numbers of serious wrecks post Covid.
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