Get Your Insurance Premium Money Back. Demand Return of Excess Profits to Strapped Consumers Now! Here's How:
Need Money? Tell your Government to Mandate Return of Excess Profits (reaped during the pandemic and before) to Insured Consumers in the America and Beyond
Call your own Governor (since state insurance commissioners have little if any power to do this on their own and many state legislatures are socially distanced from having open sessions.)
Demand an Executive Order to have your money paid in premiums to insurance companies returned to you and other Americans for the amounts of excess profits they are and have made during this PANDEMIC.
From Ralph Nader:
Ralph Nader P.O. Box 19312
Washington, DC 20036 Tel: 202-387-8030
Email: info@csrl.org
August 19, 2020
To: The Members of the National Association of Insurance Commissioners
Re: Do Your Job – Stop COVID Windfall Profits to Auto Insurers
While Americans across the country have suffered disease, death of loved ones, job losses and furloughs, business closures, and the grim reality of lingering financial pain from the mismanagement of the pandemic, the auto insurers that you oversee have never had it so good.
Over the past few weeks, insurance companies including Progressive, Allstate, GEICO, have announced startling second quarter profits. These are windfalls driven by the dramatic reduction in car accidents and claims due to the pandemic shutdown. Without a doubt, the large mutual companies who do not report quarterly results and other underwriters also posted banner quarters in their auto insurance business, since they continued to charge pre-pandemic premiums to customers living in a COVID-19-burdened world.
Consumer Federation of America raised the alarm for you to act back on March 18, 2020 and have continued to give you the information you need to start to take action. They told you that the paybacks in March through May were only half of what was required and informed you it got worse starting in June.
But, other than actions by a few state insurance commissioners, most regulators seemed content to thank insurance companies for whatever small portion of their windfall they decided to give back. The companies, meanwhile, aired heart-warming advertisements this past spring about giving back and helping their community even as they filled their coffers with billions more in profits than in normal times.
In their recent quarterly financial reports, however, the insurance companies were clear that their bonanza is due to radically changed consumer behavior during the pandemic.
Allstate (underwriting profits up 145%): “the underlying loss ratio improved by 15.9 points on lower auto insurance losses from fewer accidents, due to significant reduction in miles driven.” CEO Tom Wilson, August 5, 2020 earnings call.
Geico earnings before income taxes up 424%: “…high earnings from GEICO due to lower [auto] claims frequencies.” August 8, 2020.
Progressive (net income up 83%): “During June, we continued to see a significant decrease in auto accident frequency due to restrictions put in place to help slow and/or stop the spread of the novel coronavirus, or COVID-19, which contributed to our
companywide loss/LAE ratio for the month being 8.2 points lower than the ratio reported in June last year.” Progressive Reports June Results (News Release), July 15, 2020.
As insurance is regulated at the state level, consumers depend on their insurance commissioners and superintendents to protect them from excessive rates and to ensure fair prices in the market. This moment, with tens of millions of Americans facing deep financial stress, should be the time for you and your staff to stand up to insurance companies and demand a better response. This is the moment when your purpose should be most evident and your power most righteously deployed. When the industry you regulate reports unprecedented spikes in profits during a period of mass suffering, it is your job to check the scales, recalibrate the system, and restore equity.
To date, very few among you have stood up for the auto insurance policyholders who have paid too much for coverage over the last several months and who continue to pay too much as the pandemic and its economic consequences persist. I call upon you to immediately demand more of the insurance companies you oversee; require insurers to report profits monthly, require them to return more of these excess profits going back to March; and ensure that they continue to give back excess premium so long as Americans’ driving needs remain diminished by this pandemic.
Sincerely,
Ralph Nader
Tom Swan, Executive Director Connecticut Citizen Action Group
Rosemary Shahan, President Consumers for Auto Reliability and Safety
