According to Fitch Ratings, U.S personal lines insurance is going to make this year profitable. Considering the fact that they were struggling with the uncertainty in the economy and global pandemic corona, this hike will be seen. Still, it also made an ample amount of profit last year.
We all know that COVID 19 has made a huge impact on the global business market and the insurance sector has not got left from this. But insurers like Personal lines are making a profit as the people are driving less and making fewer auto claims. Keeping in mind the less driving, many insurance companies have reduced the premiums by 15% to 20%.
Personal line insurances are one of the major insurance markets with approximately $344 billion (54% of industry) in 2019 written premiums. Many companies have returned part of the paid premiums which becomes around $10 billion if we sum them all.
The Consumer Federation America (CFA) and the Center for Economic Justice have asked for more refunds from the insurance companies. Director of CFA has said that market forces are not enough to protect the consumers from exploit level high premiums and we need strict regulatory action to bring fair treatment with consumers.
Another insurance company Progressive Insurance has clicked a huge profit of around 83%. The advocate of consumers has pointed out this unexpected profit and has said that though the company has returned a 20% premium, it is not as per reduction in accidents and claims.Fitch has acknowledged that the premium returns are short as compared to what it should be to be fair with the consumers.