Premium Dollar Goes In US
Homeowners insurance accounted for 11% of all P/C premiums and 21% of
all personal lines insurance in 1998.
In 1998 (latest US figures available at close of publishing) claims accounted for $77 of every $100 earned in homeowners insurance premiums in the US, up from $69 reported in 1997. Wind and hail claims accounted for most of the increase.
US expenses—commissions, state premium taxes, general overhead expenses—accounted for $32 out of every $100 in premium dollars earned in 1998 (compared to $33 in 1997).
1998 investments added $12 to income, compared to $11 in 1997. The bottom line worked out to $2 after-tax profit for every $100 in premiums in the US, which is down significantly from the $6 reported in 1997.
Of note, property damage claims in 1998 accounted for 74% of claims payments (73% in 1997), and liability claims accounted for 10% (same as in 1997). The cost of settling these claims in 1998 accounted for the remaining 16% of total claim costs, down a point from 17% in 1997.
