February 29, 2008

The usual suspects are complaining that property insurance companies made "record profits," complete with an unironic clip-art of a heavyset plutocrat sitting on a pile of moneybags. It's pointless and dishonest to look at insurance profits for a single year. Insurance companies insure against the risk of rare catastrophes. A bad hurricane wipes out five or ten years of profits. If insurance companies are not allowed to make "record profits" in a year when there are few hurricanes, they will have no money to pay claims in a year when there are severe hurricanes. (This isn't the first time CJ&D releases misleading info.)