Claims News Service, Dec. 15, 9:42 a.m. EST -- A study recently released by the Insurance Research Council finds that the public greatly overestimates the profitability of the homeowners' insurance market.
According to the study, most Americans believe that homeowners' insurers earn an average of $33 in profit for every $100 received in premiums. In reality, from 1995 through 2004, insurers averaged an underwriting loss of $9 per year for every $100 received in premiums.
Only recently has the market broken even or better. In 2003, insurers' profits equaled zero. In 2004, the homeowners' market moved into the black, with insurers earning between one and nine dollars in profit.
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