Insurance Agents on the board?

I’m wondering if there are any board participants who are insurance agents, claims adjusters, underwriters, etc. I’m stunned at some of the changes I’m seeing in my own personal interaction with the insurance industry over the last few years and wonder if there is an insider that can provide some insight and understanding.

In my case, I’m not just seeing 25-30% increases this year in premiums for most of my home owners, rental, and auto insurance, but am going through hell trying to purchase insurance on an old historical home in a rural area of Southern Idaho. I just found a company that will insure me, but my rates have now gone up 260% in 4 years, where as they had gone up less than 40% in the previous 20+ years.

The pandemic induced supply chain issues, and their impact on availability and costs of construction materials, as well as changes in construction employment patterns, have driven construction and therefore homeowners claims costs up. Automobile costs increases, chip shortages, and other supply chain related changes are also driving up automobile claim costs.

That said, it feels to me like the industry is now doing what many other industries are doing: raising rates by unprecedented percentages, knowing they can get away with blaming it inflation.

OK - rant over…

Anybody out there close enough to the industry to provide any better inside understanding of what is going on?

Not an insider at all, but please share what you find out. I’ve got a claim and I’m terrified I’m going to get hosed. Ugh.

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Talked to my agent a while ago. Inflation has driven costs up, so home owners insurance has skyrocketed as they base policies on replacement costs.

Vehicles are also far more expensive to buy, which has jacked rates up as again, repairs/replacement costs have increased.

For basic home and auto, I was able to use the AARP program from the Hartford and got some solid savings. As to the rental properties and company stuff, that is a special underwriting that makes it hard to consider a savings. Back in the day my mom and dad used an independent insurance agent that handled multiple lines of insurance to work through the maze. Given even the big name agencies have a similar operation now, who knows.

I know this isn’t much of a help, but thought I would pass it along.

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I’m not going to be much help either – I sold my business and retired in 2017.

I developed and wrote an insurance program for restaurants, bars and taverns in four states – AK, CO, OR & WA – and was about to add CA when some fool met my price. Or at least I thought he was a fool. Two to three years after I sold out, I’m told that rates had doubled. I was making my carrier money at the old rates. If I hadn’t sold when I did, Elon Musk would now be my caddy and Twitter would now be called Yoda-eee. Heavy Sigh…

Anyway, I can not explain it all to you because I don’t know that much more than you do. You do seem to have a fairly good handle on it. I’d add that climate change (without debating whether or not it is man caused) accounts for some of it. Several carriers have pulled out of California and other high fire areas, or seriously restricted their writings. Same with southeastern coastal states, as hurricanes seem to be increasing in frequency and intensity.

Companies are laying off more risk to their reinsurers and I’d guess that they’re being more careful about who they reinsure with.

I had dinner one time with Warren Buffett. More accurately, I and about 80 of my closest total strangers, had dinner with him. There were ten tables of eight, all of whom underwrote for one of his insurance companies, and eight courses so two unlucky tables missed out. But I had the salad course with Warren Buffett… Apparently he did this each year, just before the Berkshire convention and he used the occasion to polish some portion of the speech that he would be giving.

Anyway, he spoke of something that I’d never heard of before – something he called “bulls.hit reinsurance”. In order to show strong financials, and secure a solid “Best Rating”, you cannot take on too much risk (relative to your assets). That’s too much total risk and too much risk of any one type. So carriers lay off that risk to reinsurers.

The problem is, in good times, carriers want to write all the insurance they possibly can and they don’t want to lay if off to reinsurers. So what happens is that you end up with (say) 40 carriers all reinsuring each other on the cheap. Then if a big hurricane hits, for example, they all go belly up because none of the reinsurance is collectible. There was no real reinsurance there; just a circular firing squad that looked like reinsurance.

My point is that with more and bigger cat losses, real reinsurance becomes more and more critical to financial survival. It’s possible that carriers on their own are abandoning bulls.hit reinsurance in favor or real reinsurance – or that regulators or the rating agencies have cracked down on it and are no longer allowing it to be used to justify a false financial picture. That would drive up costs a lot.

And I also have no doubt that insurance companies will take whatever excess profits they can get. You don’t have to have a zoom meeting to agree to raise prices.

I have one more Warren Buffett anecdote. Anybody still reading and want to hear it?



a few weeks ago my auto insurance notified me they were dropping all vehicles insured in Utah and I would need to find a new insurer. I thought that was odd, but didnt have the energy to call and ask why.

They suggested their sister company as an alternative, but the rates were 2.5 times what I was paying. I was able to find a company whise rates were better than my original insurer. Just more games I guess.

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So like everyone else at this dinner, we each had our picture taken, shaking hands with Warren. And like most others, given we represented his insurance company, I put the picture in a frame and hung it in the office.

At that point, it seems like everybody who came into the office would say pretty much the same thing: “Wow, you’re friends with Warren Buffett”. And I would of course demure and explain “No, this picture is on my desk. If it were on his desk, then I’d be friends with Warren Buffett”.

So the carrier came for a visit one time and somebody, maybe me, I don’t recall, told them of my “if it were on his desk” response. Just as they are leaving, I notice that the picture was missing and it turns out they were trying to spirit it away back to Omaha, where they were going to take a picture of Warren, at his desk, with this picture. So then I could say that I was friends with Warren Buffett.

I guess that wasn’t really a Warren Buffet anecdote as he didn’t know anything about it. But it would have been if I hadn’t reclaimed the picture. And I like the story anyway.


I like it.

We’ve bundled forever with a major - possibly expensive - company, State Farm and things have seemed relatively stable. Started with renters insurance. Never changed companies or considered Geico, Liberty etc. because I always was worried they wouldn’t pay a claim or just drop me (No data, just a vibe). Seemed like if we switched more than a few companies we’d lose our loyalty rating. Again, don’t know if that matters, but I assume they have data on all of us and know who jumps around or files a lot. Maybe I’m wrong.
Now you got me nervous, and I’ll bird-dog our rates.
Anyway, someone advised me years ago to stay with a larger, reputable companys that actually have their own money in reserves so they can take a hit, (like Huricanes, fires and such) not to be penny-wise and pound foolish, so to speak. With minimal, but a few car or house claims over 30 years wev’e never had an issue. On the threat of spring flooding we added flood insurance last year and it was about $350 a year but we didnt need it after all but that seemed reasonable.
I think we pay $400 for earthquake insurance and will prolly continue spend this because, parts of Milllcreek are higher risk for the big one. Again, $4K over ten years might be considered a waste, but we have a least a half a dozen active faults. So be it.
Purely anecdotal observations, but love to hear what insiders know.

as an asside, just watched this for the upteenth time the other day.


Our auto insurance with Farmers (I’m a former agent/owner) had more than doubled over the past 2 years. 4 Adult drivers, no tickets or accidents, no sporty cars, and South Jordan zip code.
I shopped around and ended up with Geico at a full 50% better rate for same coverages.


As an agent in the industry, is there any data on who actually pays claims more or less than others?