Insurance Costs Soar Like an Eagle, but You Can’t Live/Drive Without It
Great CPI print yesterday that gives the Fed flexibility to lower rates in September.
What is not good is the soaring costs for insurance. Adults are getting pummeled by surging auto insurance, healthcare insurance, and home insurance.
Auto insurance rose +18.6% y-o-y as reported by BLS in yesterday’s CPI report; insurers are increasing premiums in response to auto repair costs.
Home insurance rising sharply as home replacement increases with higher incurrence from damage from wind/fire/water damage results in insurance losses in 18/50 states Healthcare costs rose ~+7% y-o-y as medical care wages, pharma prices, doctor office visits and hospital costs have risen faster than CPI; healthcare insurance rose +50% over 10 years, with family coverage national average of ~$25,000 currently.
Who benefits? The insurance industry of course. IAK, the ETF of domestic insurers up +33% y-o-y. Leading insurers included in the ETF: Progressive, Chubb, Travelers, AIG, Aflac, Allstate, Met Life, Hartford. Unfortunately, we can’t drive or live without it.
Below is the IAK price chart; plus the AM Best Report on Home Insurance/states that insurance companies claim to lose money.
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