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I Am Skooter
So here's us, on the raggedy edge.
I've proven who I am so many times / the magnetic strip's worn thin
— Bruce Cockburn, Pacing the Cage
November 14, 2009
When Insurance Companies Face No Risk

The latest issue or Harpers has an article called Too Big Too Burn: AIG Plays God in a Man-Made Firestorm on the rise of insurance companies operating private fire fighting companies for their own clients’ use. Leaving aside the fact that it seems offensive to view people in times of desperation purely in terms of profit and loss, the article offers up some interesting statistics on the American insurance industry.

In 1992, after category 5 Hurricane Andrew struck Florida and Louisiana, insurers paid out more than $23 billion in claims—$1.27 for every dollar of premium collected that year…In 2005 After Hurricane Katrina the first category 5 storm of the new climate era, they paid out more than $40 billion—but only 71.5 cents per dollar collected.

When regulators decline rate hikes in excess of 40% (that’s a single year hike) the insurance companies responded by dropping “tens of thousands of policies.”

A cynic might point out that insurance companies are supposed to defray localized risks across a broad policy base, and that the nature of the business would suggest that there will inevitably be years in which money is lost. Rate hikes of 40% do nothing to defray the rish, they simply punish localized policy holders for what are—ultimately—acts of god.

My favourite line was this:

Libeery Mutual’s Private Advantage Company Combo is the first policy to protect corporate executives from global-warming lawsuits.

Yes, even global warming is now just a problem to be solved by complex instruments of voodoo economics. Ridiculous.

Posted by skooter at 7:30 PM This entry is filed under Politics.
This entry is tagged: Articles, Environmentalism, Insurance

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