I answered that question before. I don't know what the goal is for other companies, but ours is to make $0.04 on every premium dollar earned, which means that our goal is to pay $0.96 of every dollar. If we make more, it allows us to reduce rates and get more new customers, and to retain existing customers for a longer period of time. This is one of the reasons State Farm has been bleeding market share for years. They suck at underwriting. They pay out far more than they earn in premiums.
Actually State Farms goal was always to have a small underwriting loss every year. They easily recovered that in investment income. Last year they lost almost million policies. Guess what they did don't care. Most of those were policies they didn't want. As to poor underwriting that is a two fold problem. A poorly written policy with over generous pay out for additional cost of living expenses, poorly written covered loss descriptions to name a few. Some of this was addressed in the last policy rewrite. Add in a claims force that is poorly trained and almost completely elimination of field underwriters. The place is sh!t show now. Retired in May of this yr w/28 yrs on the job because I couldn't stand to work there any longer. Some of the unethical stuff upper management is forcing on claims will eventually come back to haunt them. I uave my pension and nice 41k and enjoying Florida in the winter qnd Ohio in spring, summer and fall.
Just for S and G's when I started with the Farm in 1992 they were worth 4 billion. Today its over 100 billion.
