Then, in 2008, Taxes insurers were force to pay out on one of the most destructive hurricanes in state history, i.e. hurricane Ike hitting Galveston and Houston, the Texas Department of Insurance reported. The damage and insurance cost of this hurricane caused that insurance loss ratio to skyrocket to 127%. This ratio was also influenced by insurance costs of the hail storms in Northern Texas and Hurricane Dolly in Southern Texas, both 2008.
The Dallas Morning News today highlights that the findings of the Texas Department of Insurance were released at a time when lawmakers are considering changes to the insurance regulatory system, which consumer groups say currently enables insurers to charge residents some of the highest premiums in the nation and allows insurers to reap hefty profits.
However, the Insurance Council of Texas points out, “We have our good years, and then we have our storm-plagued years. We can be thankful that Texas had a string of good years prior to 2008 so that the industry was able to meet its financial obligations in the aftermath of the weather-related catastrophes.”
Texas Watch contends that the loss figures may be overstated given that combined loss and expense ratios depict insurers with “bloated overhead expenses,” which can include large CEO salaries and agent commissions. Texas Insurance Commissioner Mike Geeslin says that the cumulative loss ratio between 2002 and 2008 was just above 58 percent, which is right in the middle of where insurers want to be in order to remain profitable.