A fight over information regarding insurer profits during the pandemic may increase state regulation.
Newly disclosed auto insurance data from throughout the pandemic has shown that insurers made excessive profits throughout that span of time, according to the Illinois Public Interest Research Group (PIRG) consumer advocacy group.
The watchdog says it is proof that the state is in need of stricter regulation of the industry.
Insurers have been fighting against the release of the auto insurance data relating to the premiums charged throughout the pandemic. That information was requested by a consumer group and state lawmaker coalition. The coalition is seeking to determine how much money insurers made when the pandemic caused drivers to drive substantially less while locked down or working from home.
Insurer trade groups stated that the request from the Illinois Department of Insurance for the information regarding premiums and profits was “neither supported nor sanctioned by statute or regulation.” That said, the insurers did eventually release the requested information on July 1.
The watchdog group is pointing to the auto insurance data spat as an demonstration of the need for regulation.
“It basically confirmed what we already knew: When you looked at the premiums these insurance companies took in, and compared that to their losses, and compared 2020 to 2019, they made big windfall profits, said Illinois PIRG director Abe Scarr. “Much higher than they would’ve needed in terms of profit just to stay where they were in 2019, which was a highly profitable year, by the way.”
According to the Illinois PIRG, its preliminary analysis revealed that “insurance companies could still owe Illinois car insurance customers $896 million in pandemic relief.”
The advocacy group used State Farm and three other large insurers to underscore what Illinois PIRG has said the auto insurance data revealed about their pandemic profits. They “charged customers $280 million more than needed to maintain their 2019 profitability, even after accounting for the $220 million they refunded customers in 2020,” said the watchdog.
The American Property Casualty Insurance Association industry trade group responded by saying that Illinois PIRG is “incorrect in its analysis of what has occurred in Illinois’ auto insurance market as the COVID-19 pandemic swept across the country.”