Advocacy Groups Slam Insurers And Regulators For Behavior During COVID

Personal auto insurers raked in profits of at least $29 billion in 2020 as miles driven, auto crashes and insurance claims plummeted due to the pandemic, according to a new study by the Consumer Federation of America (CFA) and the Center for Economic Justice (CEJ).

The study claimed that insurers collected $42 billion in excess premiums last year while providing only $13 billion in pandemic-related premium relief.

‘Instead of returning the COVID windfall to consumers, insurers increased payouts to senior management and stockholders,’ CFA said.

According to CFA and CEJ, the ‘vast majority of insurance regulators’ took no action to compel insurers to return what the advocacy groups said were illegal profits.

CFA and CEJ said that according to a study of insurers’ financial statement data and an additional analysis by AM Best regarding insurers’ premium relief, insurance companies should have returned $42 billion in premium overcharges to customers, but only returned a third of that amount.