A covert inflationary expense is having an impact on consumer spending and company profits.
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Corporate profits are being bitten by a covert inflationary cost.
While input and freight costs have decreased for some businesses, insurance costs are rising.
Travelers, a company that is part of the Dow, stated in its earnings report on Friday morning that its insurance premiums are still rising. In the most recent quarter, business policy premiums increased by 14%.
The pinch is also being felt by customers. Renewal premiums for homeownership increased by 21%, but those for auto insurance increased by 17%.
Demand isn’t being affected by those higher prices, though. The insurance company reported that “new business increased significantly” and that “retention remained historically high.”
Growing premiums are bad news for clients, whether they be individuals or businesses, even though they are good news for insurance companies like Travelers. companies.
Rising insurance costs have impacted businesses like J.B. Hunt, a freight shipper.
tough. In its earnings release on Thursday, the company disclosed that it incurred a substantial $53 million charge, or 38 cents per share, in the most recent quarter due to increased insurance and claims costs.
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“We saw upwards of 50% to 60% increases in those premiums as we reset the premiums going into 2024,” Chief Financial Officer John Kuhlow said to analysts during the company’s earnings call.
Thus, the main topic of discussion when discussing the inflationary pressures that will exist in 2024 is our premiums.
He went on to say that J.B. Hunt’s claims expenses are “what’s driving a lot of the inflationary pressures.”
John Roberts, CEO, echoed those opinions.
In the area of claims costs or settlements, “as an industry, we are also seeing unprecedented pressure,” he stated. “In the end, these inflationary costs get passed on to customers and consumers,” he continued.
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