As seen in the Sacramento Business Journal:
Auto and home insurers apparently are making excess profits
at the expense of consumers, California Insurance Commissioner John
Garamendi alleged Thursday, prompting him to schedule hearings in July to
review the system.[...]Homeowners insurers are paying only 25 to 30 cents on claims for each
dollar of premium they collect, Garamendi said Thursday.“Private passenger auto insurance presents a similar picture, even though
the loss ratios we are seeing are not as low as those we have observed in
the homeowners’ market,” he said.[...] By 2005 most carriers were spending
50 to 60 cents on claims for each dollar of premium they collected.
The summary of the study, such as it is, is available for download from the
CDI.
I can’t help but notice that the commissioner’s comments fail to include any
discussion about expense ratios, catastrophe provisions, differences in
weather, etc.
Ah, there’s nothing like using sensational headlines as a tool when
campaigning for higher office.