Summaries of the
News Releases for 2005
HOMEOWNERS INSURERS TO FILE RATES WITH
News Release Date:
Record Recovery in 2004
AUSTIN - Record
low loss ratios reported by Texas homeowners
insurers in 2004 prompted the Texas Department
of Insurance (TDI) to order some of the state’s
largest homeowners insurance groups to file and
justify their rates. The filings are due no
later than May 1, 2005.
industry had an average loss ratio of 27.6
percent. Loss ratios are the amount of claims
expressed as a percentage of the premium.
Industry expenses (premium taxes, commissions,
overhead) averaged 32.6 percent, resulting in
combined losses and expenses of 60.2 percent.
This ratio does not include the amounts that
prudent insurers will set aside for future
catastrophe losses. A single year’s experience
does not necessarily constitute a basis for rate
making but it is an indication of a market that
should be in recovery.
While low losses
can be attributed to a variety of factors, 2004
was a favorable year for insurers. Compared to
2003, which had the highest amount of wind and
hail losses in the past 20 years, 2004 had few
catastrophic storms in the coastal areas and the
traditional hailstorm areas of North and
Northeast Texas. The state was also spared the
devastation caused by hurricanes, as experienced
by Florida in 2004.
were years of the perfect storm for insurance
losses, 2004 was the year of perfect calm,” said
Texas Insurance Commissioner Jose Montemayor.
“Every year poses a new set of risks, and we
know that hurricanes and hailstorms will happen
again in Texas. Nonetheless, if insurers are
benefiting from improved trends, we expect Texas
policyholders to benefit, as well.”
reforms of Senate Bill 14 two years ago have
given TDI the ability to order adjustments in
rates when market forces do not respond to
changing conditions,” Montemayor said. “Some
insurers have lowered rates. Consumers now have
more options and should shop around. However, if
we find that adjustments are needed, we will not
hesitate to order them.”
# # #
Who Must File Rates With TDI:
Farmers Insurance Exchange
Fire Insurance Exchange
Foremost Lloyds of Texas
Automobile Association Group
United Services Automobile Association
USAA Texas Lloyds
& Casualty Corporation Group
Travelers Lloyds of Texas Insurance Co.
Travelers Personal Security Insurance Co.
Texas Select Lloyds Insurance Co.
Chubb & Son
Chubb Lloyds Insurance Co. of Texas
Texas Farm Bureau
Texas Farm Bureau Underwriters
Liberty Lloyds of Texas Insurance Co.
Liberty Mutual Fire Insurance Co.
America First Lloyds Insurance Co.
Exchange of the Automobile Club Group
Interinsurance Exchange of the Automobile Club
Auto Club Indemnity Co.
* State Farm and
Allstate were not ordered to submit rates since
they are already the subjects of administrative
proceedings regarding their homeowners rates.