The other day, I discussed the topic of increasing health insurance premiums across the country. I mentioned that perhaps we all should consider investing in health insurance companies because premiums and profits have been rising at a faster rate than claims payouts. Well it turns out that health insurance companies are not the only successful insurance producer. According to the New York Times, overall the insurance industry expects to earn about sixty billion dollars in profit. This comes after the insurance industry earned forty-three billion dollars last year in spite of natural disasters like Hurricane Katrina.
According to the New York Times,
Industry experts are estimating that profits may reach $60 billion, on a combination of higher premiums along the coasts, no major payouts for natural disasters and strong investment returns. The insurers also had high profits on other lines of coverage like auto insurance, workers compensation and general liability.
Have you ever imagined a situation when insurance companies suggest that because they have earned too much profit, they returned money to policyholders? How much profit is enough? I do not believe our government has the right to regulate the extent to which an insurance company can make a profit; however, I also believe that policyholders have the right to demand accountability if a comany ignores its obligation of good faith and fair dealing with policyholders and instead attempts to reward shareholders.