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My brother finally bought a car!!! (pg. 6)
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| Djsketchbag |
| quote: | Originally posted by dance2dabeat
:eek:
vivid????
meh I dont even care about the ppl that dont care about my brother or my thread....the fact that they are taking the time to click on my thread...read it..and respond shows that ......
never mind I am ending it there. |
i clicked just to see your bro's ride :) Plus Kel is the coolest girl ever so everyone should click on her thread!!!! |
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| Swamper |
| Yay for porkchops! w00t! |
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| StereoPrincess |
congrats brother!
first cars are always the most memorable. |
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| ChocolateTrance |
| quote: | Originally posted by ChemEnhanced
Simple answer....the investment income is greater......there is not a single insurance company that makes a profit on the premium dollars you pay....for each dollar of premium taken in on auto insurance companies pay out approximately $1.05 on claims.
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then how do you explain this?
http://www.allstate.com/investor/pr...4/2004proxy.pdf
page 3 of the 2003 annual report (pg 54 of the pdf file)
Property-liability insurance premiums = $ 24,677
Life and annuity premiums and contract charges = $ 2,304
A = Total Premiums = $ 26,981
Property-liability insurance claims and claims expense = $ 17,432
Life and annuity contract benefits = $ 1,851
B = Total Claims = $ 19,283
A - B = $ 26,981 - $ 19,283 > 0
I'm not trying to discredit your claim. You obviously know much more about the insurance industry than I do but the point that I wanted to make is that negative profit margins are not sustainable in the long-run for ANY company in ANY industry. and obviously there is a different intrepretation for the 1 to 1.05 ratio than is illustrated above. Insurance companies scam people legally. But so do a lot of other businesses (business being the key word). |
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| ChemEnhanced |
| quote: | Originally posted by ChocolateTrance
then how do you explain this?
http://www.allstate.com/investor/pr...4/2004proxy.pdf
page 3 of the 2003 annual report (pg 54 of the pdf file)
Property-liability insurance premiums = $ 24,677
Life and annuity premiums and contract charges = $ 2,304
A = Total Premiums = $ 26,981
Property-liability insurance claims and claims expense = $ 17,432
Life and annuity contract benefits = $ 1,851
B = Total Claims = $ 19,283
A - B = $ 26,981 - $ 19,283 > 0
I'm not trying to discredit your claim. You obviously know much more about the insurance industry than I do but the point that I wanted to make is that negative profit margins are not sustainable in the long-run for ANY company in ANY industry. and obviously there is a different intrepretation for the 1 to 1.05 ratio than is illustrated above. Insurance companies scam people legally. But so do a lot of other businesses (business being the key word). |
I believe this is the U.S. numbers for Allstate and insurance in the US is alot different then insurance in Ontario. It's like comparing apples to oranges. Ontario have much better injury benefits then the US. In general.....if you are hurt in a car accident in the US your own insurance company may contribute upto approximately $500,000.00 (I am probably even high on that number). In Ontario you could be looking at total payouts of 1.5 million......injury benefits is where the huge difference is. The actual physical damage to vehicles is peanuts for the insurance company. You need to take those injury costs into account. I agree that in todays market the insurance companies are breaking closer to even but they should be breaking even and making their money strickly on investments. |
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| ChocolateTrance |
| quote: | Originally posted by ChemEnhanced
I believe this is the U.S. numbers for Allstate and insurance in the US is alot different then insurance in Ontario. It's like comparing apples to oranges. Ontario have much better injury benefits then the US. In general.....if you are hurt in a car accident in the US your own insurance company may contribute upto approximately $500,000.00 (I am probably even high on that number). In Ontario you could be looking at total payouts of 1.5 million......injury benefits is where the huge difference is. The actual physical damage to vehicles is peanuts for the insurance company. You need to take those injury costs into account. I agree that in todays market the insurance companies are breaking closer to even but they should be breaking even and making their money strickly on investments. |
wow! I'm surprised there is such a huge difference between Canadian and American insurance laws in this area. I wonder why injury related expenses are not included in Allstate's consolidated income statement then if, as you say, they are so significant. I should do more research on this topic when I have the time. thanks for the info!..you and Moral post the most useful stuff in this forum.
I also agree that return on investments can be a good source of income but there is a limit to how much money insurance companies can make strickly from investments (unless of course they increase their investment base through even higher premiums). |
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| 7-4-7 |
| ...wow your a nice sister....lucky guy. |
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| Vivid Boy |
| quote: | Originally posted by Cosmic Fur
because, you know, you are a god and all.
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im NOT a god. but im the closest damn thing ta has to one. so do as i say not as i do. |
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| dance2dabeat |
| quote: | Originally posted by zokissima
Anyways, congrats to your brother. It's a pretty nice ride.
Stick-shift or auto? |
auto |
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| ChemEnhanced |
| quote: | Originally posted by ChocolateTrance
wow! I'm surprised there is such a huge difference between Canadian and American insurance laws in this area. I wonder why injury related expenses are not included in Allstate's consolidated income statement then if, as you say, they are so significant. I should do more research on this topic when I have the time. thanks for the info!..you and Moral post the most useful stuff in this forum.
I also agree that return on investments can be a good source of income but there is a limit to how much money insurance companies can make strickly from investments (unless of course they increase their investment base through even higher premiums). |
I'm sure the US company does include the injury losses but the exposure is a third of that in Ontario.
When it comes to investments...remember the insurance companies have so many different types of insurance...there's property, auto, liability. When they collect their premium from you.....they have not earned all that premium....just say you pay $400.00 a month....well if you pay all $400.00 at the beginning of the month then they have all that extra money....a portion of that money is put aside for possible claims, a portion is put aside for any current claims, and a portion is put aside incase you cancel your insurance or they cancel your insurance. The rest can go into investments....when you are dealing with as many people as insurance companies do then that is a lot of money left over to be invested. Insurance companies have a very balance portfolio and very low risk....if they need to access the money it needs to be very liquid.
The best way to tell if your branch of your insurance company did really well in a year then go to their offices and see if they purchased new furniture or did any big modifications to the office....that is a good sign they have a good year and are trying to hide the money by doing renovations that are not need.
Oh...and thank you for the compliment....we try to educate people on insurance....some people will always think insurance is evil and I can understand why but really....a lot of the evil parts of insurance come from government intervention or just a simple lack of knowledge. |
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| ChocolateTrance |
| quote: | Originally posted by ChemEnhanced
....a portion of that money is put aside for possible claims, a portion is put aside for any current claims, and a portion is put aside incase you cancel your insurance or they cancel your insurance. The rest can go into investments....when you are dealing with as many people as insurance companies do then that is a lot of money left over to be invested. Insurance companies have a very balance portfolio and very low risk....if they need to access the money it needs to be very liquid.
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right.. and if they have good portfolio managers, I'm sure that they try to make the best use out of the 'extra' money that they have left over but the only way that they can increase it (without affecting their claims budgets) is by increasing the $400 premium.
Now because they need their money to be liquid and because they want balanced(low risk) portfolios, they have to settle for lower potential returns from their investments. :) now back to work and no more tranceaddict interruptions for the night! |
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