As a consumer, nobody likes a rate increase on their insurance especially if you haven’t filed a claim in the past couple of years. What we all too often forget is that insurance is a group risk made up of hundreds of thousands of people just like yourself. And, since insurance companies are certainly in the business to make money, when they lose money you see it directly impact the rate you pay the following year. We all go to work to make money, right?
Before we show you the profitability results from the top 100 carriers in 2019, let’s make sure you understand the single most important term for determining profitability. It is called COMBINED RATIO. The combined ratio is the sum of two parts: claims that are paid to people like us on our policies (called the loss ratio) and all other expenses needed to operate the insurance company.
1.00 is the benchmark. That’s a dollar. So, if you have a combined ratio of 0.95 for 2019, the insurance company has made five cents profit on each dollar they have earned. If you have a combined ratio of 1.05, that means the insurance company has lost five cents on each dollar they have earned. In the past, insurance companies could help offset negative earnings with diversified investments. However, low interest rates and an unstable market make the true combined ratio count ever so much. So, where does your company stand on this list?
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You can also view the table here https://infogram.com/nupc_2020_top100-groups-1ho16ve79xk72nq