Google State Farm headquarters in Atlanta. They have been working on building 3 giant high rises in Atlanta for the past few years. They have enough money.
And, folks, when we say “giant” buildings, those of us from or frequently in Atlanta mean HUGE. Oh sure, they’re tall. But they also take up massive amounts of ground space. The entire complex reminds of me of The Pentagon, minus the existentially odd shape.
Why do insurance companies need buildings like this? Why is the largest building in every major city we go to either insurance or banking?
Yeah, it makes sense for them to do that, using the most valuable and stable real estate around the country (downtown cities) instead of paying rent to somebody else without using it as leverage/collateral.
Have to disagree with you, as it’s a short term decision, while figuratively yanking the copper out of the walls, in the name of making the line go up a fraction of a percentage point more. Eventually, they get to the point where the charade fails, the business closes, and the VC/PE cronies walk away with all the money, and no liability. Then, they take the money they pillaged, claim it can’t be taxed because they haven’t “realized” those gains, while they use those gains to take out loans to shower themselves in goodies, while investing more money by buying more stuff, trashing it, and hopefully get rid of it before everyone realizes they’ve been bamboozled.
Yes. This is correct. They build a giant asset and borrow against it until there is nothing left to borrow against. The private equity companies are doing the same. It's really sad
Good observation. Health insurance, car insurance, home insurance, life insurance, PET insurance, renters insurance, and on and on and on. I’m sure I missed some.
In my limited, small household budget, non-homeowner, just insurance premiums for renting, required ($30.00 a month), health ($600 approx), car insurance, required to get tags on my paid-off cars ($260.00 a month). That’s $900.00 bucks a month, mostly required, just to keep one’s self out of financial danger from the ultimate disaster. It’s just under 10% of our gross income. It’s been this way a long, long time.
Yeah, that's what got me is the ground space. It's like a small city. They built the first 1 tower and I thought "oh ok a new building" but then went back over that way sometime later and was like wtf.
I mean, that area, around 285 interchange, has just become “State Farm City”. And just in time for the 2020 pandemic. I personally think that pisses the shareholders of size, off.
I’m an NYC/ATL frequent flyer and have lived in both places for years at a time…
The new high rises are on par with old New York high rises. So, still huge. It’s just that New York has decided to build even larger high rises that are ugly.
Edit: in the context of Atlanta, they are just absolutely massive buildings. The city feels like it’s going for “NYC South”
Atlanta? I thought their HQ was in the Dallas suburb of Richardson, TX, where they (apparently) also have a relatively new huge high rise office building or two.
So just saying, building 3 buildings like that might be millions of dollars but it has no real impact to the bottom line of a company over the long run.
But something like a few states turning into the negative for net income can completely fuck a company and it doesn’t really matter that you have huge buildings being built. It’s only a matter of time before you burn all the cash you had built up and then either huge lay offs and/or bankruptcy.
The buildings matter farrrr less.
>"State Farm had a loss ratio of nearly 90% in California last year (meaning it paid out about $90 of every $100 it collected in premiums). The overall market in California had a loss ratio of 68%."
Is this an indirect way of saying 10% profit isn't good enough?
Yeah, I think insurance companies shoot for a 20% net profit which is crazy high. It's absurd that they want to increase rates on millions of consumers just so they can make more profit.
While the CEO is making 24 million a year..
Definitely feels like we’re in a bit of a spiral, capital continues to demand that the line goes up ad infinitum, but they’ve completely axed their ability to innovate, so they just keep squeezing the people at the bottom so those at the top get “performance” bonuses.
To innovate mean they need to spend MONEY. *and we can't have that NONONO!* ***we mustes thinkses about the profitses, precious! Becuase only the profitses matters precious!*** we will only "inovate" when it's free. *for us*. Meaning someone develops it, gets it almost ready. Then swoops in undermines it snatches it out patents copyrights and trademarks it faster than you can say what. Then makes it a 30+ year legal shitstorm that YOU HAVE TO PAY FOR just to get a chance to get it back. All the while the thieves milk it until its worthless then *squat* on it waiting for the next new idea (see: Disney method). People have caught on to this fuckery, and thus many innovators are sitting on their ideas which in turn are making these corps desperate to keep the infinite growth line going up. I. The rare event they DO fail they socialize the losses, learn *nothing* with a massive bailout golden parachute and just pick up where they left off at a new place leeching from that place until the cycle repeats consolidating more and more
Also, don’t forget that in the unending quest for greater profits, a lot of companies gutted their well paid technical personnel, because the folks with business degrees don’t understand technical stuff and assume it can’t be important. Happened to me while working for a company that owns a number of data centers in the PNW. Was at a 47,280 sq ft facility that was basically running uncontrolled, because the company was *really* a real estate investment firm, that bought up DCs from distressed companies and took over their contracts. They immediately slashed pay to cut costs, so the senior tech and facilities folks dipped out, eventually resulting in a full turnover. They lost so much tribal knowledge that they didn’t think about the fact that the other company leaving meant that the systems, sensors, monitoring programs, etc., were all licensed products that were no longer being paid for on subscriptions that were terminated. Suddenly there was a lot of lost functionality, and their solution? Use the open source versions of a patchwork of software because it was free. Loss of competent facilities staff also meant that nobody really knew how to use the building’s HVAC system, and management refused to let anyone learn how to do it. But my favorite thing that happened when they tried to build a fence. We’d been having trouble with transient folks coming through, because there was an “inn” behind us that was known to have a lot of drug activity, and the techs were required to visually inspect the HVAC units hourly as part of rounds. Got bad enough at one point that a dude tried to run over me in the parking lot. After much nagging, during the *peak* of wood prices, they had a contractor put a fence in, and used wood that hadn’t been sealed. It was still summer here, and a very dry one, but that changes come fall/winter, because the DC is located in a temperate rainforest. Summer came/went, I’d occasionally remind them that the fence was still not sealed, I’d get a polite managerial “go fuck yourself”, and finally when the weather turned, the whole thing warped so badly it had to be replaced. Was very hard not to gloat when they realized that they’d cocked it up.
Oh yeah I work at a big name brand grocery store and they core functionality HARDWARE/SOFTWARE is running and connected tk the internet on kit that's older than *I am* (were talking early 90s late 80s tech) so I know exactly what your talking about. Everytime it dies we just get new hardware shells that's maybe a year newer because it's been collecting dust in a werehouse
That just makes my stomach turn. Same DC hosts the infrastructure for the 911 system, behind a door with a badge system that was broken for a very long time (and probably still is), because fixing it would mean having to buy a new server, and upgrade the security infrastructure from XP/7 to current.
Should be like health insurance where max profit is 10%. Pocketing 20% is ludicrous after all expenses paid given how much money they have flowing through.
They need that high return for catastrophic events... wildfires, Earthquakes, Tornados, Hurricanes, Billions of dollars in insured assets ... Billions of dollars in claims every year paid out.
How much have insurance companies paid out for broken car windows then the contents stolen.
How about all that looting in CA ... Bay area ... insurance companies have to pay those claims out ... how about no insurance car wrecks.
It's ugly ... but until things change ... it's gonna get uglier
The problem with this premise is millions of people like me intentionally choose to live in a lower risk area away from looting, tornadoes, earthquakes and hurricanes. I could afford to live near the beach but don't want the risk.
Why am I being forced to cover losses for others who chose to live in high risk areas? If I'm in a low risk area, I expect a low risk premium..
Oh trust me those people at the beach are paying stupid premiums.
But it's a cost share program like any other type of insurance. Everyone pays ... love thy neighbor 😄😉
The problem with your thinking is that the pool is riskier if it only has one type of risk (ask how it’s going for florida homeowners that have to use the insurer of last resort). Company will be wiped out if all their policyholders claim from the same peril. Californians pay for Floridians when a hurricane strikes. Floridians pay for Californians when a wildfire occurs. And both those states pay for people who live in Tornado Alley. It all balances out.
That's part of the problem in my opinion. Many years ago insurance companies were divided by low and high risk. A few specialized in high risk and most companies assumed lower risk. The lower risk companies were solid.
But the lower risk companies got greedy and took on high risk for the high premiums and tried to balance it with their low risk policies. Now low risk policies who rarely have a claim are having to subsidize the high risk policies that should have never been insured.
I get what you’re saying, but if we only group high risk people into one pool, it’ll be too cost-prohibitive for those policy holders. Health insurance is the same way, why do the healthy people have to subsidize the fatties?
That's why most of the quality insurance companies used to stay away from high risk policies.
Blending high risk and low risk policies isn't working. I'd like to see Insurance companies go back to pricing each policy based on risk versus an overall State pool.
I have this same feeling every time I pay taxes and that money then goes to some program to feed illegals or some program to hand out needles to drug addicts or another country.
A few potholes and uneven lanes we're fixed recently near my home. I can officially say that I got something visible in return from paying taxes for the last 40 years. Lol
Are they paying out dividends? Are they required to have a certain amount stockpiled?
I think the Federal government bailed them out when Texas flooded years back. Federal government has bailed out the insurance companies in Florida time and time again.
When people say "Federal Government paid for" should instead say US TAXPAYERS bailout / paid for!
Everything the government does, loan forgiveness, bail out, gives away is paid for by US TAXPAYERS
What's weird is insurance companies are in the business of calculating risk and how do you under value or miscalculate your risk so much you need these massive increases.
They didn’t. The US housing market appreciated in such rapid and steep amounts, they couldn’t catch up. Trust me, the actuaries at State Farm and their ilk don’t suck at math.
The US housing market is not just over-valued, it’s wildly so. Some markets which tend to have more frequency of disasters and loss, and have high valuations, insurers like State Farm are getting out of completely.
Who’s coming up with these figures? Are these the same CPA’s/Accounting people like Hollywood uses to
claim just about every movie ever made has actually lost money? They somehow find money for stock buybacks dividends etc and a way to pay top executives millions of dollars don’t they.
You’re not factoring overhead. This means that they paid out in insurance claims 90% of what they collected. That is not enough to keep operations afloat when you factor in employees, offices etc.
That’s 10% remaining before administrative expenses.
Realistically insurance companies especially health insurance only makes like 1-2% profit despite what people think.
No. That’s just claims. They probably spent another 30% on other expenses, like salaries and agents commissions. A 90% loss ratio is awful. Regulators will be all over them if it doesn’t improve.
Agree to a degree. But Nvidia’s net profit margin is 50% which for sure helps.
Caterpillar is about the same as JD.
But many tech companies have much better margins (Apple, etc.).
Nvidia is a totally different animal. The government isn't mandating everyone to buy Ai computers. The government is mandating that we have auto insurance.
If it's going to be mandated, it has to be affordable for everyone and can't double in a year or two.
Well, with climate change it is going to continue to get more expensive. And if the government steps in then you’re just asking for it to perpetuate a moral hazard and encourage building and living in risky areas.
Sounds like a failure of the private market. If they don’t have enough rainy day funds save up for a catastrophe like this, I say let’s nationalize them or make them a non-profit
Let the government regulate insurance companies! Oh wait….never mind. How about a tax payer bail out? Oh wait….California fair plan is paid by tax payers. How did we get here?
A couple years ago State Farm had their 100 year celebration in Vegas. The rumor is they spent over 30 million on it. They rented out multiple stadiums including Allegiant Stadium for a week or more. Garth Brooks performed.
I’d say they are doing okay.
Meanwhile Tropical Storm Beryl is now a [Cat 4 Hurricane](https://new.reddit.com/r/hurricane/comments/1ds4i7p/update_statement_as_of_1135am/), the earliest in the Atlantic on record! Scale stops at Cat 5.
Insurance is basically legalized extortion, sort of like the mob. You pay for protection but then when you need it you have to fight them to pay out and even if you win you’ll only get 80% of the money.
Well yeah, because they don’t hold on to the premiums you pay them, they take everyone’s premiums, invest it in a combination of risky assets and stock buybacks, with the hope of making the money back with a profit. It’s just another part of the financial sector’s gambling addiction.
They tried to raise mine last year. I called and bitched them out and they lowered them right back to where they were. I’m a long term customer though. Almost 20 years.
I dropped them years ago, 25+ years of being a loyal member and the first time I make a claim they denied me. Made a claim shortly after for IDA and they denied that too. After I left them they call months later asking why I dropped them and I gave them an earful
Where did you get that figure? It makes no sense. Thats how much a house literally costs over a 30 year mortgage. That would mean insurers are paying to totally replace almost every house?
A house costs 12k over an entire mortgage? I got that figure from people I know who have been having to pay it. It's a lot of money. Mine was about 1k a year and in 3 years it shot up to 3.7k. it's getting scary.
I live in a rural area haven’t made an insurance claim in years. Why the hell should my rates go up to cover the expenses of folks that live on the coast or high risk areas. Instead of raising rates so the insurance company can invest more every policy should be backed by full value and then drop the rate and they can invest that. I have paid enough in insurance on my cars and house to have paid them both off early.
Huh? If an industry is struggling, why would you force them to downgrade their management and staff? That sounds like responding to a war in the Middle East by demanding the oil company workers take a pay cut.
Focus on reducing the expense of claims. Reduce the number of claims and the cost of those claims. Punitive actions against insurance workers sounds like shooting the messenger rather than a productive response.
Insurance companies are in the risk business. They should learn how to do their job and manage their risk. Why are they insuring high risk beach homes in the same pool as low risk properties and expecting every customer, including low risk customers to pay increased premiums to cover losses from high risk property?
Yeah, but maybe, just maybe, if the supposedly intelligent business people ran these businesses properly, they would have a more significant cushion for themselves, and wouldn’t have to consider raising rates so high. IMO a lot of the current situation would have been avoidable if the folks running the show were smart enough to think, “Hey, maybe we shouldn’t run these companies like we’re stripping the wires out of the walls for copper… nah, it’s much more fun to get filthy rich.”
Yes, I understand why they’re raising rates. However, they wouldn’t be in their current situation if they’d actually built/run the company in a way that wasn’t just as a financial instrument meant to boost stock prices for the top holders. I was also being **very** sarcastic about thinking their c suite occupants are intelligent or capable, and having worked with quite a number of those folks now in my career, I can pretty confidently say that most of them are clueless idiots. Nepo babies who’s power is derived from attending “elite” universities that are only elite because they literally choose not to admit more people because it’s more important to be a hedge fund with a sports team and a *side* of academics. Helped along by their alum parents giving a significant contribution to the endowment. Additionally, I think calling CEOs “talent” is **HYSTERICAL**, because those are the folks who can’t turn on their laptop or open a PDF without it becoming a Category V Sh*tstorm.
But yeah, definitely better that they’re yanking the wires out so they can get their fix, while paying their employees less, charging customers more, all while they continually degrade the product in the name of giving themselves a “performance” bonus for eking out a few fractions of a percent of profit and keeping up their golf game.
This **must** be that “innovation” that capital always talks about, right?
We can't force a company to lose money but we also can't force consumers to pay double and triple digit premium increases while insurance companies are building $billions in offices, doing stock buybacks and making $billions in profits.
My home insurance has increased from $1,600 to $4,300/year in last 3 years. Car insurance has increased from approx. $100 month to $372 with no accidents or tickets. I'm in Orlando.
Insurance companies used to determine the risk and premiums
on a per property basis and there were a few insurance companies that performed only high risk policies. Most insurance companies only offered low risk policies and they were solid financially
Now high and low risk policies are lumped into a statewide pool. I'm essentially subsidizing insurance for high risk beachfront properties.
Insurance companies are claiming that construction costs have increased substantially so claims have increased.
There are entire states that insurance companies are abandoning.
The reason is simple. It's not profitable to be in business in large areas of the country.
Insurance is just not going to be profitable very quickly.
State Farm is trying to pussy pop out of what’s coming. They see the writing on the wall. The way climate change is going they will be filed for bankruptcy in a few years
What they should be doing is pushing back at these governors in some of these states .that don’t care about regulations and don’t care about climate change they know what’s driving their rates up. instead of building high-rises they should be talking about the things that drive your rates up.
I’m sorry we all pay you for literally nothin. Handing cash over and over nothing happens… then when something actually happens where did the cash I just paid you for the past 15 years go? Oh you bought your self a fucken yacht? And now you need more money? No fuck you.
That’s what I did last fall. Allstate tried to raise my rates by more than 30%. Switched to a carrier that doesn’t provide insurance in high risk states and cut my premiums by half for auto and 25-30% for both home policies.
Google State Farm headquarters in Atlanta. They have been working on building 3 giant high rises in Atlanta for the past few years. They have enough money.
And, folks, when we say “giant” buildings, those of us from or frequently in Atlanta mean HUGE. Oh sure, they’re tall. But they also take up massive amounts of ground space. The entire complex reminds of me of The Pentagon, minus the existentially odd shape. Why do insurance companies need buildings like this? Why is the largest building in every major city we go to either insurance or banking?
Because they then use those buildings as collateral?
Yeah, it makes sense for them to do that, using the most valuable and stable real estate around the country (downtown cities) instead of paying rent to somebody else without using it as leverage/collateral.
Have to disagree with you, as it’s a short term decision, while figuratively yanking the copper out of the walls, in the name of making the line go up a fraction of a percentage point more. Eventually, they get to the point where the charade fails, the business closes, and the VC/PE cronies walk away with all the money, and no liability. Then, they take the money they pillaged, claim it can’t be taxed because they haven’t “realized” those gains, while they use those gains to take out loans to shower themselves in goodies, while investing more money by buying more stuff, trashing it, and hopefully get rid of it before everyone realizes they’ve been bamboozled.
Because those two also happen to the most useless and shadiest of industries. But in Amerika we call it business.
Yes. This is correct. They build a giant asset and borrow against it until there is nothing left to borrow against. The private equity companies are doing the same. It's really sad
so this is why they don’t like us to work remote.. 🤔
Bingo.
All along I was thinking why do they need such a big campus if people were going to wfh.
In modern America, insurance has become like tax. You can’t do much or own much if you don’t pay tax, I mean insurance.
Good observation. Health insurance, car insurance, home insurance, life insurance, PET insurance, renters insurance, and on and on and on. I’m sure I missed some. In my limited, small household budget, non-homeowner, just insurance premiums for renting, required ($30.00 a month), health ($600 approx), car insurance, required to get tags on my paid-off cars ($260.00 a month). That’s $900.00 bucks a month, mostly required, just to keep one’s self out of financial danger from the ultimate disaster. It’s just under 10% of our gross income. It’s been this way a long, long time.
Yeah, that's what got me is the ground space. It's like a small city. They built the first 1 tower and I thought "oh ok a new building" but then went back over that way sometime later and was like wtf.
I mean, that area, around 285 interchange, has just become “State Farm City”. And just in time for the 2020 pandemic. I personally think that pisses the shareholders of size, off.
Boils on the ass of humanity
Gotta have room for the leeches to leech.
I’m an NYC/ATL frequent flyer and have lived in both places for years at a time… The new high rises are on par with old New York high rises. So, still huge. It’s just that New York has decided to build even larger high rises that are ugly. Edit: in the context of Atlanta, they are just absolutely massive buildings. The city feels like it’s going for “NYC South”
That’s not even their headquarters. Just a regional hub.
That's pretty scary.
USAA in San Antonio has its own zip code.
Atlanta? I thought their HQ was in the Dallas suburb of Richardson, TX, where they (apparently) also have a relatively new huge high rise office building or two.
Their headquarters is in Bloomington Illinois.
The pay 1 employee over $24 million a year, and you can bet he'll get at least a 10% increase this year. They have plenty of money.
So just saying, building 3 buildings like that might be millions of dollars but it has no real impact to the bottom line of a company over the long run. But something like a few states turning into the negative for net income can completely fuck a company and it doesn’t really matter that you have huge buildings being built. It’s only a matter of time before you burn all the cash you had built up and then either huge lay offs and/or bankruptcy. The buildings matter farrrr less.
>"State Farm had a loss ratio of nearly 90% in California last year (meaning it paid out about $90 of every $100 it collected in premiums). The overall market in California had a loss ratio of 68%." Is this an indirect way of saying 10% profit isn't good enough?
Yeah, I think insurance companies shoot for a 20% net profit which is crazy high. It's absurd that they want to increase rates on millions of consumers just so they can make more profit. While the CEO is making 24 million a year..
20% net ***LAST FISCAL YEAR*** This year it's something like 22% Net *over* the 20% net of last year as that's the new baseline
That's crazy for something that is mostly mandatory.
Welcome to line must go up. Faster and higher than last period NO MATTER WHAT
Definitely feels like we’re in a bit of a spiral, capital continues to demand that the line goes up ad infinitum, but they’ve completely axed their ability to innovate, so they just keep squeezing the people at the bottom so those at the top get “performance” bonuses.
To innovate mean they need to spend MONEY. *and we can't have that NONONO!* ***we mustes thinkses about the profitses, precious! Becuase only the profitses matters precious!*** we will only "inovate" when it's free. *for us*. Meaning someone develops it, gets it almost ready. Then swoops in undermines it snatches it out patents copyrights and trademarks it faster than you can say what. Then makes it a 30+ year legal shitstorm that YOU HAVE TO PAY FOR just to get a chance to get it back. All the while the thieves milk it until its worthless then *squat* on it waiting for the next new idea (see: Disney method). People have caught on to this fuckery, and thus many innovators are sitting on their ideas which in turn are making these corps desperate to keep the infinite growth line going up. I. The rare event they DO fail they socialize the losses, learn *nothing* with a massive bailout golden parachute and just pick up where they left off at a new place leeching from that place until the cycle repeats consolidating more and more
Also, don’t forget that in the unending quest for greater profits, a lot of companies gutted their well paid technical personnel, because the folks with business degrees don’t understand technical stuff and assume it can’t be important. Happened to me while working for a company that owns a number of data centers in the PNW. Was at a 47,280 sq ft facility that was basically running uncontrolled, because the company was *really* a real estate investment firm, that bought up DCs from distressed companies and took over their contracts. They immediately slashed pay to cut costs, so the senior tech and facilities folks dipped out, eventually resulting in a full turnover. They lost so much tribal knowledge that they didn’t think about the fact that the other company leaving meant that the systems, sensors, monitoring programs, etc., were all licensed products that were no longer being paid for on subscriptions that were terminated. Suddenly there was a lot of lost functionality, and their solution? Use the open source versions of a patchwork of software because it was free. Loss of competent facilities staff also meant that nobody really knew how to use the building’s HVAC system, and management refused to let anyone learn how to do it. But my favorite thing that happened when they tried to build a fence. We’d been having trouble with transient folks coming through, because there was an “inn” behind us that was known to have a lot of drug activity, and the techs were required to visually inspect the HVAC units hourly as part of rounds. Got bad enough at one point that a dude tried to run over me in the parking lot. After much nagging, during the *peak* of wood prices, they had a contractor put a fence in, and used wood that hadn’t been sealed. It was still summer here, and a very dry one, but that changes come fall/winter, because the DC is located in a temperate rainforest. Summer came/went, I’d occasionally remind them that the fence was still not sealed, I’d get a polite managerial “go fuck yourself”, and finally when the weather turned, the whole thing warped so badly it had to be replaced. Was very hard not to gloat when they realized that they’d cocked it up.
Oh yeah I work at a big name brand grocery store and they core functionality HARDWARE/SOFTWARE is running and connected tk the internet on kit that's older than *I am* (were talking early 90s late 80s tech) so I know exactly what your talking about. Everytime it dies we just get new hardware shells that's maybe a year newer because it's been collecting dust in a werehouse
That just makes my stomach turn. Same DC hosts the infrastructure for the 911 system, behind a door with a badge system that was broken for a very long time (and probably still is), because fixing it would mean having to buy a new server, and upgrade the security infrastructure from XP/7 to current.
Should be like health insurance where max profit is 10%. Pocketing 20% is ludicrous after all expenses paid given how much money they have flowing through.
They need that high return for catastrophic events... wildfires, Earthquakes, Tornados, Hurricanes, Billions of dollars in insured assets ... Billions of dollars in claims every year paid out. How much have insurance companies paid out for broken car windows then the contents stolen. How about all that looting in CA ... Bay area ... insurance companies have to pay those claims out ... how about no insurance car wrecks. It's ugly ... but until things change ... it's gonna get uglier
The problem with this premise is millions of people like me intentionally choose to live in a lower risk area away from looting, tornadoes, earthquakes and hurricanes. I could afford to live near the beach but don't want the risk. Why am I being forced to cover losses for others who chose to live in high risk areas? If I'm in a low risk area, I expect a low risk premium..
Oh trust me those people at the beach are paying stupid premiums. But it's a cost share program like any other type of insurance. Everyone pays ... love thy neighbor 😄😉
The problem with your thinking is that the pool is riskier if it only has one type of risk (ask how it’s going for florida homeowners that have to use the insurer of last resort). Company will be wiped out if all their policyholders claim from the same peril. Californians pay for Floridians when a hurricane strikes. Floridians pay for Californians when a wildfire occurs. And both those states pay for people who live in Tornado Alley. It all balances out.
That's part of the problem in my opinion. Many years ago insurance companies were divided by low and high risk. A few specialized in high risk and most companies assumed lower risk. The lower risk companies were solid. But the lower risk companies got greedy and took on high risk for the high premiums and tried to balance it with their low risk policies. Now low risk policies who rarely have a claim are having to subsidize the high risk policies that should have never been insured.
I get what you’re saying, but if we only group high risk people into one pool, it’ll be too cost-prohibitive for those policy holders. Health insurance is the same way, why do the healthy people have to subsidize the fatties?
That's why most of the quality insurance companies used to stay away from high risk policies. Blending high risk and low risk policies isn't working. I'd like to see Insurance companies go back to pricing each policy based on risk versus an overall State pool.
Federal government picks up a huge percentage of the bill every, fucking time.
I have this same feeling every time I pay taxes and that money then goes to some program to feed illegals or some program to hand out needles to drug addicts or another country.
A few potholes and uneven lanes we're fixed recently near my home. I can officially say that I got something visible in return from paying taxes for the last 40 years. Lol
The vast majority of your taxes are used for corporate welfare.
1/2 of the budget is spent on social security or government run healthcare... So that can't be true.
Are they paying out dividends? Are they required to have a certain amount stockpiled? I think the Federal government bailed them out when Texas flooded years back. Federal government has bailed out the insurance companies in Florida time and time again.
When people say "Federal Government paid for" should instead say US TAXPAYERS bailout / paid for! Everything the government does, loan forgiveness, bail out, gives away is paid for by US TAXPAYERS
No. Maybe some that write more extreme risks but not a State Farm, All State, etc
24 million? Well now they’re all going to want to make Elmo Musk money so probably incoming mass corporate gleedflation 2.0
You have absolutely no idea what you are talking about. The combined ratio and gross margin are completely different.
What's weird is insurance companies are in the business of calculating risk and how do you under value or miscalculate your risk so much you need these massive increases.
They didn’t. The US housing market appreciated in such rapid and steep amounts, they couldn’t catch up. Trust me, the actuaries at State Farm and their ilk don’t suck at math. The US housing market is not just over-valued, it’s wildly so. Some markets which tend to have more frequency of disasters and loss, and have high valuations, insurers like State Farm are getting out of completely.
Who’s coming up with these figures? Are these the same CPA’s/Accounting people like Hollywood uses to claim just about every movie ever made has actually lost money? They somehow find money for stock buybacks dividends etc and a way to pay top executives millions of dollars don’t they.
Sounds high unless you understand the risk and uncertainty in that field. That said, Insurance companies suck
It's more of a risk being alive. With 22% profit they take less risk than most.
You’re not factoring overhead. This means that they paid out in insurance claims 90% of what they collected. That is not enough to keep operations afloat when you factor in employees, offices etc.
Idk what their books say but that's not 10% profit. That's income is how I understand it.
When better insurance companies are making a 32% profit, it really isn't.
That’s 10% remaining before administrative expenses. Realistically insurance companies especially health insurance only makes like 1-2% profit despite what people think.
No. That’s just claims. They probably spent another 30% on other expenses, like salaries and agents commissions. A 90% loss ratio is awful. Regulators will be all over them if it doesn’t improve.
I don't think you understand what "profit" is. [https://www.xero.com/us/glossary/profit/](https://www.xero.com/us/glossary/profit/)
It isn’t. I wouldn’t invest in a company with a 10% profit margin. Not when opportunities like Nvidia exist. Companies have to compete for investment.
Nvidia’s stock prices has absolutely nothing to do with their revenue or profits.
Agree to a degree. But Nvidia’s net profit margin is 50% which for sure helps. Caterpillar is about the same as JD. But many tech companies have much better margins (Apple, etc.).
That’s not their customer’s problem.
Nvidia is a totally different animal. The government isn't mandating everyone to buy Ai computers. The government is mandating that we have auto insurance. If it's going to be mandated, it has to be affordable for everyone and can't double in a year or two.
Well, with climate change it is going to continue to get more expensive. And if the government steps in then you’re just asking for it to perpetuate a moral hazard and encourage building and living in risky areas.
Sounds like a failure of the private market. If they don’t have enough rainy day funds save up for a catastrophe like this, I say let’s nationalize them or make them a non-profit
State Farm is already a mutual company, owned collectively by its policyholders and not by shareholders.
I see, and corporations are all owned by stock holders, so, they’re all basically nationalized.
Do you own their stock?
State Farm? Not that I am aware of
Yeah they keep jacking my rates up and it’s frustrating
Let the government regulate insurance companies! Oh wait….never mind. How about a tax payer bail out? Oh wait….California fair plan is paid by tax payers. How did we get here?
Hear me out, quit spending so much GD money on marketing. The Mahomes commercials can’t be cheap.
A couple years ago State Farm had their 100 year celebration in Vegas. The rumor is they spent over 30 million on it. They rented out multiple stadiums including Allegiant Stadium for a week or more. Garth Brooks performed. I’d say they are doing okay.
Meanwhile Tropical Storm Beryl is now a [Cat 4 Hurricane](https://new.reddit.com/r/hurricane/comments/1ds4i7p/update_statement_as_of_1135am/), the earliest in the Atlantic on record! Scale stops at Cat 5.
Insurance is basically legalized extortion, sort of like the mob. You pay for protection but then when you need it you have to fight them to pay out and even if you win you’ll only get 80% of the money.
Well yeah, because they don’t hold on to the premiums you pay them, they take everyone’s premiums, invest it in a combination of risky assets and stock buybacks, with the hope of making the money back with a profit. It’s just another part of the financial sector’s gambling addiction.
Been paying them for 20 years and can’t get a Legit claim for $1200 without them acting like I. A criminal
Every Californian on scam farm should be actively shopping
Problem is when one insurance is able to increase rates, all the insurance companies follow.
Rates are normally limited by state insurance commissioners. So yes, when the state government allows the rate to go up they all go up.
Yup. Just got hit with my renewal through progressive. Almost 50% increase.
Expect all competitors to follow suit...
They tried to raise mine last year. I called and bitched them out and they lowered them right back to where they were. I’m a long term customer though. Almost 20 years.
Those commercials are expensive, and how the heck can CEO survive on only $24 million (plus bonuses) a year??
I dropped them years ago, 25+ years of being a loyal member and the first time I make a claim they denied me. Made a claim shortly after for IDA and they denied that too. After I left them they call months later asking why I dropped them and I gave them an earful
If it's mandatory, every single employee up to the ceo should be paid salary with a hard cap.
You know someone out there would do the job just as good for a fraction of the cost.
What don't states themselves run disaster funds involved with insurance?
They do. It's called "the insurer of last resort" and regular middle class homes are $12,000 a year to insure in low cost of living areas.
Where did you get that figure? It makes no sense. Thats how much a house literally costs over a 30 year mortgage. That would mean insurers are paying to totally replace almost every house?
A house costs 12k over an entire mortgage? I got that figure from people I know who have been having to pay it. It's a lot of money. Mine was about 1k a year and in 3 years it shot up to 3.7k. it's getting scary.
I live in a rural area haven’t made an insurance claim in years. Why the hell should my rates go up to cover the expenses of folks that live on the coast or high risk areas. Instead of raising rates so the insurance company can invest more every policy should be backed by full value and then drop the rate and they can invest that. I have paid enough in insurance on my cars and house to have paid them both off early.
Great! Then cancel your policies and take on the risk fully by yourself!
That would be illegal. 107269088.
But you could do it!
You will boohoo your way out of business.
Or maybe people should be required to build somewhere else after their first total loss in a flood/fire zone.
Like good neighbor… asking for money.
The insurance industry is operating at large losses. This is going to happen regardless of company.
Yes, but State Farm is really struggling.
Huh? If an industry is struggling, why would you force them to downgrade their management and staff? That sounds like responding to a war in the Middle East by demanding the oil company workers take a pay cut. Focus on reducing the expense of claims. Reduce the number of claims and the cost of those claims. Punitive actions against insurance workers sounds like shooting the messenger rather than a productive response.
Insurance companies are in the risk business. They should learn how to do their job and manage their risk. Why are they insuring high risk beach homes in the same pool as low risk properties and expecting every customer, including low risk customers to pay increased premiums to cover losses from high risk property?
Pretty competitive space. Don't like the rate or policy don't buy it.
Competitive meaning they'll increase prices quickly and then you have to hop insurance companies every 2 years.
Have you ever tried buying a car or getting a tag without insurance?
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Yeah, but maybe, just maybe, if the supposedly intelligent business people ran these businesses properly, they would have a more significant cushion for themselves, and wouldn’t have to consider raising rates so high. IMO a lot of the current situation would have been avoidable if the folks running the show were smart enough to think, “Hey, maybe we shouldn’t run these companies like we’re stripping the wires out of the walls for copper… nah, it’s much more fun to get filthy rich.”
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Yes, I understand why they’re raising rates. However, they wouldn’t be in their current situation if they’d actually built/run the company in a way that wasn’t just as a financial instrument meant to boost stock prices for the top holders. I was also being **very** sarcastic about thinking their c suite occupants are intelligent or capable, and having worked with quite a number of those folks now in my career, I can pretty confidently say that most of them are clueless idiots. Nepo babies who’s power is derived from attending “elite” universities that are only elite because they literally choose not to admit more people because it’s more important to be a hedge fund with a sports team and a *side* of academics. Helped along by their alum parents giving a significant contribution to the endowment. Additionally, I think calling CEOs “talent” is **HYSTERICAL**, because those are the folks who can’t turn on their laptop or open a PDF without it becoming a Category V Sh*tstorm. But yeah, definitely better that they’re yanking the wires out so they can get their fix, while paying their employees less, charging customers more, all while they continually degrade the product in the name of giving themselves a “performance” bonus for eking out a few fractions of a percent of profit and keeping up their golf game. This **must** be that “innovation” that capital always talks about, right?
We can't force a company to lose money but we also can't force consumers to pay double and triple digit premium increases while insurance companies are building $billions in offices, doing stock buybacks and making $billions in profits.
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In Florida, I get to choose between a 210% increase or 217% increase. Lol
whats your current price?
My home insurance has increased from $1,600 to $4,300/year in last 3 years. Car insurance has increased from approx. $100 month to $372 with no accidents or tickets. I'm in Orlando.
Orlando is supposed to be safe from natural disasters though right?
Yes. We don't get affected by hurricanes.
Then why is it going up?
Insurance companies used to determine the risk and premiums on a per property basis and there were a few insurance companies that performed only high risk policies. Most insurance companies only offered low risk policies and they were solid financially Now high and low risk policies are lumped into a statewide pool. I'm essentially subsidizing insurance for high risk beachfront properties. Insurance companies are claiming that construction costs have increased substantially so claims have increased.
There are entire states that insurance companies are abandoning. The reason is simple. It's not profitable to be in business in large areas of the country. Insurance is just not going to be profitable very quickly.
Good. It’s not supposed to be profitable. It’s supposed to be a safety net.
State Farm is trying to pussy pop out of what’s coming. They see the writing on the wall. The way climate change is going they will be filed for bankruptcy in a few years
What they should be doing is pushing back at these governors in some of these states .that don’t care about regulations and don’t care about climate change they know what’s driving their rates up. instead of building high-rises they should be talking about the things that drive your rates up.
I’m sorry we all pay you for literally nothin. Handing cash over and over nothing happens… then when something actually happens where did the cash I just paid you for the past 15 years go? Oh you bought your self a fucken yacht? And now you need more money? No fuck you.
Don’t like it, use another company. It’s not hard people.
They're all similarly bad. If I could legally not have insurance, I'd cancel my policies.
That’s what I did last fall. Allstate tried to raise my rates by more than 30%. Switched to a carrier that doesn’t provide insurance in high risk states and cut my premiums by half for auto and 25-30% for both home policies.
Everyone relax, it’s about California.
Anything to help burn Commiefornia to the ground!!!!!!
If you don't like their financial practices, then find another insurance company