First, a few weeks ago, the insurance industry's profits were tallied against their losses by the L.A. Times. The conclusion of this research? The Insurance Industry had its most profitable year in a long time. Their profits, even taking into account the nasty natural disasters (which they have tried to avoid paying out on), went up 18.7%.
What does 18.7% translate to, you may ask? Well, according to the same article the insurance companies made a collective profit of about $44.8 billion (yes that is with a "b"). That is after all the payouts from claims last year. In addition to the profit, their surplus went up 7% to $427 billion.
However, despite all the billions of dollars in profits, the insurance companies spokesman downplayed these profits. They stated,
"We're not being good stewards of our investors' capital or our
policyholders' surplus if we keep doing business where we can't make
Imagine that. Turning a profit and providing a service that society needs (albeing providing the service part grudingly) is apparently not enough. Apparently record breaking profits is not making money these days. This then begs the question, at what point are the insurance companies being "good stewards of [their] investors' capital"?
So as promised, today it was reported that many insurance providers are cancelling coverage for hurricanes in states from Texas to Florida and up the Atlantic coast to New York. Apparently AIG is taking it a step further.
Somehow, I'm sure, the insurance companies will start blaming the lawyers for this.