Indiana Injury Law Blog

For years people have had an understanding that the reason insurance premiums have risen is due to the fact that too many lawsuits are filed and frivolous claims are being made. Lawyers have been the targets.

According to an article in the New York Times, Earnings for Insurers are Soaring, Joesph B. Treaster informs us that natural disasters, the terrorist attacks in 2001, and strong investment returns are deemed responsible for high insurance premiums.

In 2005, after Hurricane Katrina and other storms, insurers paid out $61 billion for damages and still ended up with a profit of $43 billion that adds to a decades-long earning streak with the exception of the terrorist attacks in 2001 when there was a loss of $7 billion that staggered the insurers. Although the insurers have been raising prices since the attacks, their underwriting losses declined from $52.6 billion in 2001 to $4.9 billion in 2003. In 2004, the insurers made a $4.3 billion profit on underwriting.