The Texas Department of Insurance released the “Texas Homeowners Insurance Loss Data 1992-2008” report, which shows an estimated incurred loss ratio for 2008 at a record high of 127.0, and a combined loss and expense ratio at 165.0.
Estimated losses for 2008 are $6,565,744,849, while direct premiums earned by Texas homeowners insurers for 2008 came in at only $5,169,021,636.
The loss ratio is defined as the percentage of losses, (claims insurers have paid) versus what insurers have collected in premiums. Loss ratio excludes loss adjustment expense, commissions, taxes and other overhead expenses.
The TDI says that the combined loss ratios are a better snapshot of what is happening in the current insurance market. The combined loss and expense ratio takes into account a company’s expenses for agent commissions, overhead, and administrative costs.
The TDI says the 2008 loss data is preliminary but represents data from all major insurers. Expense data includes direct Texas expenses; countrywide expenses attributable to Texas have not yet been reported for 2008 and therefore historic values were used to determine current estimates.
To view the report online visit: http://www.tdi.state.tx.us/news/2009/news200910.html.
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