American Samoa and Washington, D.C., were the worst U.S. markets for insurers in 2009 as foreclosures and a tsunami in the South Pacific triggered customer payouts.
Insurers in Washington spent 49 percent more on claims and other expenses than the $1.6 billion they collected in premiums last year, the National Association of Insurance Commissioners said today in a report. In American Samoa, a U.S. territory in the South Pacific, carriers paid out more than 13 times the $85,000 of premiums they received.
Insurance companies including Travelers Cos. and Allstate Corp. seek to limit risks posed by storms and economic downturns by selling a range of policies in different regions. Mortgage guarantee contracts, which protect lenders when homeowners fail to meet loan payments, cost carriers nationwide more than twice the amount they collected, the NAIC said. In Washington, mortgage-policy payouts were seven times premiums.
The U.S. Virgin Islands, Hawaii and Puerto Rico were the most profitable markets in 2009, the NAIC said. Overall, insurers retained half a cent for every dollar of premium, the NAIC said. The companies made an additional 5.4 cents on every premium dollar through investment returns, the NAIC said.
The report included results from property-casualty, mortgage and financial guarantee businesses. Life insurance was excluded. In 2008, carriers posted underwriting profits in Washington and American Samoa, according to the NAIC.
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