Honolulu (HawaiiNewsNow) - Gordon Ito is State Insurance Commissioner. He sent out letters recently to insurance companies directing them to submit that rates for homeowners insurance. He joins us this morning.
Why did you send out these letters?
We looked at the Association of Insurance Commissioners 2009 profitability. There were several key figures that indicated that homeowners insured in Hawai'i will make excessive profits. The first figure was that for losses incurred, they were only paying 16.9% or in other words, for every dollar the insurance companies are collecting on homeowners, they only paid 17 cents.
The other key figure we looked at was what we called the return on that work, or return on equity, and that indicated they were making a 45.6% return, or in other words, in our banks we only get maybe 1% if we're lucky. Insurance companies were getting 45%.