Where The Auto Insurance Premium Dollar Goes 2001-2002
In 2002 claims accounted for $80 of every $100 earned in private
passenger auto insurance in the US, down from $84 reported in
US auto premium dollar information for 2001 and 2002 is detailed
on the chart below.
US expenses—commissions, state premium taxes, general expenses—accounted
for 24% of the premium dollar both years.
US investments added $6 to income in 2002, down from $8 in 2001.
The bottom line equates to about $1 in aftertax profit for every
$100 in premiums in the US in 2002. Despite the $8 investment gain
in 2001, insurers realized no aftertax profit due to higher claims
Of note, US lawyers’ fees accounted for $13 out of every
$100 in premiums both years, split 50–50 between plaintiffs’
and defendants’ attorneys.
Theft continues to account for about 25% of all comprehensive claims.
The charts below show US premium dollar data for 2001 and
2002 in graphic form. The top charts show where the revenue dollar
(premiums and investment income) comes from, and the lower charts
show where the revenue dollar goes in terms of claims, expenses
Note: 2001 charts are based on every $100 of revenue plus investment
income of $8, for a total of $108.
2002 charts are based on every $100 of revenue plus investment income
of $6, for a total of $106.
||Travelers Insurance Company issued the first
auto insurance policy to Dr. Truman Martin of Buffalo 105 years
ago. The $12.25 policy provided $500 in coverage. Martin was
concerned about crashes between his car—one of only 4,000
in the entire country—and horses, which numbered about
20 million at the time. Today cars and trucks outnumber horses
221 million to just under 2 million.