RNW: All Lines Michigan vs. All Line US, 1998–2007* Avg. RNW MI: 7.2% US: 7.6% Profitability in Michigan’s property/casualty insurance markets is below.

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Presentation transcript:

RNW: All Lines Michigan vs. All Line US, 1998–2007* Avg. RNW MI: 7.2% US: 7.6% Profitability in Michigan’s property/casualty insurance markets is below that of the US p/c insurance average *Latest available return on net worth (RNW) figure from the National Association of Insurance Commissioners is Sources: NAIC, Fortune; Insurance Information Institute. Figure 1.

RNW: Michigan All Lines vs. Fortune 500, 1998–2007* *Latest available return on net worth (RNW) figure from the National Association of Insurance Commissioners is Sources: NAIC, Fortune; Insurance Information Institute. Avg. RNW MI: 7.2% US: 13.6% Profitability in Michigan’s property/casualty insurance markets is barely half that of the Fortune 500 benchmark Figure 2.

RNW: Michigan Pvt. Pass. Auto vs. US Pvt. Pass. Auto, * Avg. RNW MI: 2.1% US: 8.4% Profitability in Michigan’s auto insurance market—at just 2.1%- -is just 1/4 that of the US average *Latest available return on net worth (RNW) figure from the National Association of Insurance Commissioners is Sources: NAIC, Fortune; Insurance Information Institute. Figure 3.

Percent Michigan Auto RNW vs. 10-Year US Treasury Yield, * *Latest available return on net worth (RNW) figure from the NAIC is Sources: NAIC, Federal Reserve; Insurance Information Institute. Avg. RNW MI: 2.1% US: 4.9% The average return experienced by Michigan’s auto insurers is less than half that of a risk-free investment in 10-year US Treasury securities. MI’s auto insurance market is not risk free. Figure 4.

Average Auto Insurance Expenditure Michigan vs. US, * YearMIRankUS 2000$70216$ *Latest available data from the National Association of Insurance Commissioners is for Sources: NAIC; Insurance Information Institute. Figure 5.

Consumer Price Index for Medical Care vs. All Items, Source: Department of Labor (Bureau of Labor Statistics; Insurance Information Institute. (Base: =100) Inflation for Medical Care has been surging ahead of general inflation (CPI) for 25 years. Since , the cost of medical care has more than tripled Soaring medical inflation is a major driver of cost in Michigan no-fault auto insurance claims, with no end in sight. Figure 6.