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As insurers adjusters fan out across the states that were hit by deadly tornadoes over the past...

As insurers adjusters fan out across the states that were hit by deadly tornadoes over the past few days, Mickey Meece on Fortune highlights a recent study (.pdf) that suggests that insurers have shifted the costs for such disasters to consumers and taxpayers through higher premiums, increasing deductibles, and other methods.
Comments (2)
  • runlong
    , contributor
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    Sounds like all of them are following in Farmers foot steps.......
    4 Mar 2012, 10:54 AM Reply Like
  • dcfleck
    , contributor
    Comments (52) | Send Message
    Wait a minute... <i>of course</i> insurers are shifting the costs onto policy holders. Where do people think that money comes from?


    Reading the associated news release, it appears that the industry as a whole currently has more than the "required" surplus reserves (though that is never spelled out), but less than the recommended surplus reserves. The press release characterizes this situation as "significantly overcapitalized", which just strikes me as incorrect.


    The press release also says that the "surplus would have risen by $15 billion in 2011 even with the tornadoes and floods that caused huge losses, if they had not paid stockholder dividends", as though stockholder dividends were some sort of extravagant luxury on the part of the industry. The authors of the study seem to have a very different concept than I of the role of insurance companies.
    4 Mar 2012, 02:01 PM Reply Like
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