In 1992, US Insurance companies collected $20.5 billion in premiums and reported a pretax loss of $11.8 billion on home insurance, not counting earnings from investments, according to A. M. Best, an insurance rating agency. In 2005, the home insurers took in $52.2 billion in premiums and reported a pretax loss of $643.6 million; losses had been cut to a sliver of sales. In 2005, with investment earnings of $1.9 billion, the home insurers had a net gain, before taxes, of $1.3 billion.
One measure of the new efficiency of the home insurance business is its ratio of claims expenses to premiums. In the year of Hurricane Andrew, the industry paid out $1.27 for every dollar of premium it collected. In 2005, the year of the more destructive Hurricane Katrina, the insurers paid out 71.50 cents for every dollar of premium.
Still they whine, that they can’t afford to offer coverage at all in many areas, and the deductibles get higher and higher. Insurance companies simply suck.