Insurance Companies Are Charging More For Their Protection
Insurance companies are charging more as their profits continue to fall. The reasons for declining profits include an increase in claims for non-catastrophe claims as well as losses from catastrophes. Additionally low interest rates are resulting in lower returns for the investments made by insurance companies.
Revenue from insurance premiums are growing, however, pre-tax income for the insurance industry has fallen 8% between 2014 and 2018.
Business are being hard hit across different industries. For example, Texas Roadhouse, a fast food chain has seen increases in the cost of their insurance policy.
“This is the first year we’ve seen where it really didn’t matter what your loss history was,” said Patrick Sterling, a corporate employee at Texas Roadhouse.
2019 in particular has seen increases in the cost of insurance. For example, in the first three quarters of last year, the cost of property insurance increased by 6.7%. Additionally, these increases are coming despite not having a history of loss.
The global insurance industry was substantially affected by the increased number of hurricanes and wildfires during 2017 and 2018. Natural catastrophes during those two years cost the global insurance over $200 billion.