The homeowners' insurance industry cannot expect to earn its cost of capital, according to Aon Re's study of the homeowners marketplace.
The homeowners line filed through June 2002 is returning onl ...
The homeowners' insurance industry cannot expect to earn its cost of capital, according to Aon Re's study of the homeowners marketplace.
The homeowners line filed through June 2002 is returning only 4.8% on capital.
The rate increases follow announcements of poor financial results for the homeowners insurance industry that has suffered from catastrophes.
The news comes as the New York Times reported that hundreds of thousands of homeowners in the U.S. could lose their home insurance.
Chief economist for the Insurance Information Institute Robert Hartwig said: "The Texas homeowners insurance market is the most dysfunctional in the United States today.
"A confluence of a lot of events has brought the market to the brink of collapse."
Hartwig also pointed out that further homeowner rate increases or other underwriting actions may need to be taken by insurers to fully recover the cost of capital.
