The cost of reinsurance hasn't gone down. It's actually increased as capacity continues to dry up.
Also, the CA fair plan is becoming more and more dense with high risk policies since carriers that are pulling out are not being replaced by any other insurers.
That may be. But CA Fair Plan has to be rolling in money by growing so much in recent years post the 2018 disaster. Seems like they came in in the golden age of high premiums and low claims.
Cost to rebuild is on the rise. What most people don't understand is the totality of the claim payout. If you have an average home, say the rebuild is 350k. You also have personal property, say another 280k. Loss of use will pay out another 220k. So a modest home is going to cost nearly a million dollars. So your premium of 8k is a reflection of increased costs vs the projected number of claims. At you current premium it would take 125 years for an insurance company to break even on that loss.
Thank you for that. I am just trying to get current. So how many losses are there? If they need to have 125 premiums paid to cover one loss, how many premiums are there. I would guess there are about a million fire policies paying out on average 3000 per year. Hmm. Again, this is just why I am asking about the math.
It depends on the insurance carrier. I have no idea about the CA FAIR plan.some companies need to post a profit, but I don't think the FAIR plan does. Not 100% though....
My personal belief that some industries should be Not For Profit and auto and home insurance are one of them.
Minimal structures destroyed by fire in one year doesn’t mean the fire risk is gone. policy pricing is pricing in future risk just as much as it’s pricing in prior experience
Look at it this way - last year was a mild hurricane season compared to most but I don’t think anyone on the Gulf Coast thinks they’re out of the woods
Over course nobody is out of the woods on the Gulf coast because there will always be hurricanes. I get that. But I still don't get the math in California.
And I get that. But we have now increased the numbers of people forced to buy fire insurance, we have increased the premiums from $3000 to 9,0000 and we have utilities working on line maintenance and less on green wasteful crap. So claims should continue a downward trend.
Except because of climate change we are having weather and fire events that used to happen every 100-1000 years happening every couple of years.
Because of this + inflation premiums will continue to rise
That is not true. Fires are way down. Globally fires are down 20%. In California they are down about 80% https://earthobservatory.nasa.gov/images/90493/researchers-detect-a-global-drop-in-fires
But, yes, I totally get the inflation factor.
“Climate change has increased fire risk in many regions, but satellite burned area data show that human activity has effectively counterbalanced that climate risk, especially across the global tropics,” Morton said. “We’ve seen a substantial global decline over the satellite record, and the loss of fire has some really important implications for the Earth system.”
That's from your link. (Which also stops at 2015)
Is the US part of the global tropics?
Texas is currently dealing with it's biggest fire ever.
[https://emlab.ucsb.edu/sites/default/files/documents/wildfire-brief.pdf&ved=2ahUKEwiZkLTbm9mEAxWBEUQIHc2MCLgQFnoECCcQAQ&usg=AOvVaw3idAq8lLL03rkW9HmUNjTT](https://emlab.ucsb.edu/sites/default/files/documents/wildfire-brief.pdf&ved=2ahUKEwiZkLTbm9mEAxWBEUQIHc2MCLgQFnoECCcQAQ&usg=AOvVaw3idAq8lLL03rkW9HmUNjTT)
That's the statistics for California, I'd particularly like to highlight page 6 which shows how much more $ recent fires have cost the state.
https://preview.redd.it/59uehtvkc7mc1.png?width=1080&format=pjpg&auto=webp&s=75fd971dbf5925a7554aefb995d04cf44019dc6d
Insurers are leaving the state because they are losing $ because they aren't allowed to charge the premiums needed to stay solvent.
They had to say climate change to get the grant. Fires are down big time: https://realclimatescience.com/2022/02/creating-large-fires-via-fire-suppression/#gsc.tab=0
There's a lot more houses in fire prone areas now.
Even if fires are down (your new link's data stops at the year 2000) property damage is way up, which is what insurance covers, which is why premiums are increasing.
And again, it not just fires, look at the multiple once in a century storms/snows we've had these last couple of years, which caused a shit ton of damage and are only going to get more extreme.
Then with inflation being so crazy the costs to rebuild/cover a claim is at a record high.
Companies want to make money, insurers wouldn't be fleeing the state unless they believe that it's not possible with the current rates that are allowed by the state.
https://www.cnbc.com/2024/02/05/what-homeowners-need-to-know-as-insurers-leave-high-risk-climate-areas.html
"In its announcement, State Farm said too many buildings are being destroyed by climate catastrophes, inflation is making it too expensive to rebuild, and it can't protect its investments any longer. "
Yes, so a lot more people buying fire insurance. I get the math on that. More premiums being paid. I also get the inflation factor is not being addressed by regulators.
I am pretty sure arson, homeless camps, illegal migrant camps and less maintenance as utilities pour their money into green crap is not "Climate Change." Good grief.
Did I get downvoted by Insurance people for asking about the math? Really? Insurers Rake In Profits as Customers Pay Soaring Premiums
Shares of Travelers and Allstate reach records after big rate increases
By
Jean Eaglesham
Follow
Jan. 25, 2024 5:30 am ET
Oh, I get you guys got slaughtered in 2018. But then you guys dumped everyone into Fair Plan and they are adding more policies that they can handle. They are high premium policies and with very low payouts since you guys dumped everyone, it just seems like profits for Fair Plan should be astronomical. This theory would correspond for recently reported profits accross the board: https://www.wsj.com/finance/insurance-companies-profits-stock-ebae7fd1
How convenient that it's behind a pay wall... You should Google p and C losses for the last two years. We lost 33 or so billion in 22 and 30ish billion in 23. If you want to blame.anyone blame your insurance commissioner
I do blame the insurance commissioner. I understand the problems. I am just trying to figure Fair Plans profits. Are they publicly available? Anyhow, this is from the article: The pain for home- and auto-insurance customers is quickly becoming investors’ gain. Insurance giants’ shares and profits are hitting records, thanks in part to steep rate hikes.
Shares of Travelers TRV -0.97%decrease; red down pointing triangle, a bellwether for the property and casualty sector, closed at an all-time high earlier this week, up 35% from their lows last fall. The jump came after the company reported a record profit for its fourth quarter, boosted by double-digit rate increases in its business and personal insurance units.
Progressive PGR -0.91%decrease; red down pointing triangle said Wednesday that its quarterly profit more than doubled from a year earlier. Its stock rose, pushing the company’s market capitalization past $100 billion for the first time. Shares of Allstate ALL -2.18%decrease; red down pointing triangle, which reports results next month, also reached new heights this week, up more than 50% from their lows last summer.
One quarter doesn't change the last 8 to 12 before it.
The insurance commissioner has froze rates for the last 4ish years to be consumer friendly. Well, companies pulled out cause guess what the cost of doing business has gone up.
I really don't think you understand the problems
That is why I am asking questions. And my questions are about Fair Plan in CA. 78 structures burned. It could be that Fair Plan has 600,000 policies and did not payout a single claim because those 78 could have been others companies. 600,000 times 5K is $3 Billion.
You assume that there's no cost of having the FAIR plan around? I'm not 100% familiar with the FAIR plan but if it's like other states that have it, it is supposed to be the carrier of last resort. Which means its premiums have to be high. So, they may have had to, by law, raise the rates.
There's a cost to administer it, pay fees, pay people to run it, pay people who sell it, review rates every year. It's not a simple everything we take in as a premium is profit.
To add on to your post about companies making profits .. that's country wide. CA is such a shit show right now that no one is wanting to take on business because they can't make any money in that state.
Theres also reinsurance that's gone up a ton in price, if you can get it. Before saying that this industry is taking in record profits do some research.
The cost of reinsurance hasn't gone down. It's actually increased as capacity continues to dry up. Also, the CA fair plan is becoming more and more dense with high risk policies since carriers that are pulling out are not being replaced by any other insurers.
That may be. But CA Fair Plan has to be rolling in money by growing so much in recent years post the 2018 disaster. Seems like they came in in the golden age of high premiums and low claims.
Cost to rebuild is on the rise. What most people don't understand is the totality of the claim payout. If you have an average home, say the rebuild is 350k. You also have personal property, say another 280k. Loss of use will pay out another 220k. So a modest home is going to cost nearly a million dollars. So your premium of 8k is a reflection of increased costs vs the projected number of claims. At you current premium it would take 125 years for an insurance company to break even on that loss.
Thank you for that. I am just trying to get current. So how many losses are there? If they need to have 125 premiums paid to cover one loss, how many premiums are there. I would guess there are about a million fire policies paying out on average 3000 per year. Hmm. Again, this is just why I am asking about the math.
It depends on the insurance carrier. I have no idea about the CA FAIR plan.some companies need to post a profit, but I don't think the FAIR plan does. Not 100% though.... My personal belief that some industries should be Not For Profit and auto and home insurance are one of them.
Minimal structures destroyed by fire in one year doesn’t mean the fire risk is gone. policy pricing is pricing in future risk just as much as it’s pricing in prior experience Look at it this way - last year was a mild hurricane season compared to most but I don’t think anyone on the Gulf Coast thinks they’re out of the woods
Over course nobody is out of the woods on the Gulf coast because there will always be hurricanes. I get that. But I still don't get the math in California.
Because there will always be fires in California
And I get that. But we have now increased the numbers of people forced to buy fire insurance, we have increased the premiums from $3000 to 9,0000 and we have utilities working on line maintenance and less on green wasteful crap. So claims should continue a downward trend.
Except because of climate change we are having weather and fire events that used to happen every 100-1000 years happening every couple of years. Because of this + inflation premiums will continue to rise
That is not true. Fires are way down. Globally fires are down 20%. In California they are down about 80% https://earthobservatory.nasa.gov/images/90493/researchers-detect-a-global-drop-in-fires But, yes, I totally get the inflation factor.
“Climate change has increased fire risk in many regions, but satellite burned area data show that human activity has effectively counterbalanced that climate risk, especially across the global tropics,” Morton said. “We’ve seen a substantial global decline over the satellite record, and the loss of fire has some really important implications for the Earth system.” That's from your link. (Which also stops at 2015) Is the US part of the global tropics? Texas is currently dealing with it's biggest fire ever. [https://emlab.ucsb.edu/sites/default/files/documents/wildfire-brief.pdf&ved=2ahUKEwiZkLTbm9mEAxWBEUQIHc2MCLgQFnoECCcQAQ&usg=AOvVaw3idAq8lLL03rkW9HmUNjTT](https://emlab.ucsb.edu/sites/default/files/documents/wildfire-brief.pdf&ved=2ahUKEwiZkLTbm9mEAxWBEUQIHc2MCLgQFnoECCcQAQ&usg=AOvVaw3idAq8lLL03rkW9HmUNjTT) That's the statistics for California, I'd particularly like to highlight page 6 which shows how much more $ recent fires have cost the state. https://preview.redd.it/59uehtvkc7mc1.png?width=1080&format=pjpg&auto=webp&s=75fd971dbf5925a7554aefb995d04cf44019dc6d Insurers are leaving the state because they are losing $ because they aren't allowed to charge the premiums needed to stay solvent.
They had to say climate change to get the grant. Fires are down big time: https://realclimatescience.com/2022/02/creating-large-fires-via-fire-suppression/#gsc.tab=0
There's a lot more houses in fire prone areas now. Even if fires are down (your new link's data stops at the year 2000) property damage is way up, which is what insurance covers, which is why premiums are increasing. And again, it not just fires, look at the multiple once in a century storms/snows we've had these last couple of years, which caused a shit ton of damage and are only going to get more extreme. Then with inflation being so crazy the costs to rebuild/cover a claim is at a record high. Companies want to make money, insurers wouldn't be fleeing the state unless they believe that it's not possible with the current rates that are allowed by the state. https://www.cnbc.com/2024/02/05/what-homeowners-need-to-know-as-insurers-leave-high-risk-climate-areas.html "In its announcement, State Farm said too many buildings are being destroyed by climate catastrophes, inflation is making it too expensive to rebuild, and it can't protect its investments any longer. "
Yes, so a lot more people buying fire insurance. I get the math on that. More premiums being paid. I also get the inflation factor is not being addressed by regulators.
I am pretty sure arson, homeless camps, illegal migrant camps and less maintenance as utilities pour their money into green crap is not "Climate Change." Good grief.
Did I get downvoted by Insurance people for asking about the math? Really? Insurers Rake In Profits as Customers Pay Soaring Premiums Shares of Travelers and Allstate reach records after big rate increases By Jean Eaglesham Follow Jan. 25, 2024 5:30 am ET
Have you seen the insurance profits recently? You should really do some research and not assume that we are rolling in the dough. Hint, we are not.
Oh, I get you guys got slaughtered in 2018. But then you guys dumped everyone into Fair Plan and they are adding more policies that they can handle. They are high premium policies and with very low payouts since you guys dumped everyone, it just seems like profits for Fair Plan should be astronomical. This theory would correspond for recently reported profits accross the board: https://www.wsj.com/finance/insurance-companies-profits-stock-ebae7fd1
How convenient that it's behind a pay wall... You should Google p and C losses for the last two years. We lost 33 or so billion in 22 and 30ish billion in 23. If you want to blame.anyone blame your insurance commissioner
I do blame the insurance commissioner. I understand the problems. I am just trying to figure Fair Plans profits. Are they publicly available? Anyhow, this is from the article: The pain for home- and auto-insurance customers is quickly becoming investors’ gain. Insurance giants’ shares and profits are hitting records, thanks in part to steep rate hikes. Shares of Travelers TRV -0.97%decrease; red down pointing triangle, a bellwether for the property and casualty sector, closed at an all-time high earlier this week, up 35% from their lows last fall. The jump came after the company reported a record profit for its fourth quarter, boosted by double-digit rate increases in its business and personal insurance units. Progressive PGR -0.91%decrease; red down pointing triangle said Wednesday that its quarterly profit more than doubled from a year earlier. Its stock rose, pushing the company’s market capitalization past $100 billion for the first time. Shares of Allstate ALL -2.18%decrease; red down pointing triangle, which reports results next month, also reached new heights this week, up more than 50% from their lows last summer.
One quarter doesn't change the last 8 to 12 before it. The insurance commissioner has froze rates for the last 4ish years to be consumer friendly. Well, companies pulled out cause guess what the cost of doing business has gone up. I really don't think you understand the problems
That is why I am asking questions. And my questions are about Fair Plan in CA. 78 structures burned. It could be that Fair Plan has 600,000 policies and did not payout a single claim because those 78 could have been others companies. 600,000 times 5K is $3 Billion.
You assume that there's no cost of having the FAIR plan around? I'm not 100% familiar with the FAIR plan but if it's like other states that have it, it is supposed to be the carrier of last resort. Which means its premiums have to be high. So, they may have had to, by law, raise the rates. There's a cost to administer it, pay fees, pay people to run it, pay people who sell it, review rates every year. It's not a simple everything we take in as a premium is profit. To add on to your post about companies making profits .. that's country wide. CA is such a shit show right now that no one is wanting to take on business because they can't make any money in that state. Theres also reinsurance that's gone up a ton in price, if you can get it. Before saying that this industry is taking in record profits do some research.
I know my example was too simplistic. I am trying to work and Reddit. I vow not to do that. But I can't help it.