Lack of Transparency in Auto Insurance Market Cost U.S. Consumers $101 Billion in the Last Five Years, ValChoice Study Finds
By a
How an insurer was organized affected how much of its customers' premium payments it pocketed, ValChoice found. From 2011-2015, mutual companies that paid dividends (companies owned by policyholders) kept the smallest percentage of their customers' premium payments, thereby providing the best value to the consumer. Publicly traded insurers kept the largest percentage, thereby providing the worst value. Privately held insurers fell in the middle.
Compared to mutual companies that pay dividends, privately held companies kept an additional
For households, the difference between using a publicly traded company vs. a policyholder-owned company that paid dividends equaled nearly four months' worth of car insurance payments. On average, households that bought their auto insurance from publicly traded companies received
"When we did our analysis, it was clear that shareholder pressure is having a material impact on the quality of the insurance protection consumers are buying," said
For consumers, getting less value from their auto insurer is a growing problem, the ValChoice study found. Twenty-eight percent of the
The ValChoice analysis examined the percentage of net earned premiums per year that companies paid out in loss compensation. This is known as the Paid Loss Ratio (PLR). Paying a claim would count as a paid loss, for instance. The ValChoice study found that privately held and publicly traded insurers had significantly lower PLRs than did insurers owned by their policyholders.
The
Keywords for this news article include:
Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2016, NewsRx LLC
Allstate Assurance Co Separate Account B Files SEC Form 40-OIP/A, Applications Under The Investment Company Act Reviewed By Office of Insurance…
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News