Is insurance industry crying wolf?
This is the same tired old saw that has been repeated for decades. We have seen it because we have been fighting for policyholder rights the whole time.
Crying wolf over insurance "crises" is a constant theme of insurance companies, as a method of reducing policy obligations. When the product liability "crisis" hit, insurance companies cried wolf. The industry survived and thrived. When the asbestos "crisis" hit, the industry cried wolf. They survived and thrived. When the environmental "crisis" hit, the insurance industry cried wolf. They survived and thrived. When Sept. 11 claims hit, the insurance industry cried wolf. They survived and thrived.
Now that insurance companies are being called upon to deliver upon the promises they made for claims arising out of the Katrina disaster, once again they cry "wolf." Yet even after accounting for the claims of Katrina policyholders and other claims during 2005, the property/casualty insurance industry made a record $44.8 billion profit last year. This profit increase, an 18.7% increase over the previous year, included Hurricane Katrina and other big storms. In addition to enormous profits, the insurance industry raised its surplus by more than 7% to $427 billion, according the National Association of Insurance Commissioners.
Perhaps policyholders paying premiums that are too high, and receiving claim service that is too miserly, should be the ones crying.
William G. Passannante
Anderson Kill & Olick, P.C.
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|Title Annotation:||Comment, Katrina-Loss|
|Author:||Passannante, William G.|
|Article Type:||Brief article|
|Date:||Sep 1, 2006|
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