The property-casualty industry has “dramatically” increased profits and surplus in recent years, in part by “systematically overcharging for insurance and shifting costs to consumers and taxpayers,” the Consumer Federation of America charged in a report released last week that was blasted by insurers.
The report–first revealed in the Jan. 8 edition of National Underwriter–drew immediate fire from industry trade groups and a securities analyst who characterized it as misleading because it seeks to lump all product lines together, which the critics said is inappropriate.
Moreover, Gary Ransom, a managing partner and p-c industry analyst at Fox-Pitt Kelton, said the report examines the issue of homeowners insurance only for 2006, when it was profitable everywhere, even though overall, “all the premiums ever collected for property insurance in Florida and the Gulf Coast have not covered all the [recent hurricane] claims on those properties.”
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