Often, people tell more of the truth than they intended to. A case in point was a story on NPR's Morning Edition today. It seems that consumer groups have been criticizing the insurance industry for keeping a much higher portion of premium dollars than used to be the case. In 2005, despite Katrina, insurance companies made record profits
To rebut this, the Insurance Information Institute sent out its chief economist, Robert Hartwig. He pointed out that in the 1980's, insurance rates were two to three times as high as they are now, and that means that the companies can't afford to pay out what they used to disgorge.
Fair enough. BUT, this excuse gives the lie to the alibi that insurers have used to justify sky-high rates by creating fears of a non-existent "malpractice crisis," or bleating about a need for "tort-reform" to reduce the size of personal-injury verdicts. What Mr. Hartwig said was that insurance rates are first and foremost a function of the investment climate, especially the bond market, and not of claims payments. Which is exactly what critics of insurance companies have said when the insurers have tried to limit recoveries for torts and malpractice. Either the companies were lying then or they're lying now.
You can't have it both ways.