tag:blogger.com,1999:blog-10533897.post110737497123439284..comments2023-12-22T09:29:45.273-05:00Comments on InsureBlog: Okay, Smart Guy, Riddle Me This…H G Sternhttp://www.blogger.com/profile/09024546809016528222noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-10533897.post-1107953937400110052005-02-09T07:58:00.000-05:002005-02-09T07:58:00.000-05:00Rates go up and the natural inclination (of the co...Rates go up and the natural inclination (of the consumer) is to blame the carrier, or the industry in general.<br /><br />Fact is, insurance is a demand driven business with (in many cases) limited supply. The greater the demand, the greater the claim frequency, and, in some cases, the higher the ultimate claim is. <br /><br />Loss ratios are the result of two things . . . frequency & magnitude. Some cat claims are getting more expensive, such as treating premies, spinal cord injuries, head trauma. As medicine advances more expensive treatments follow.<br /><br />But cat claims are only a small portion of total claims. The bulk of claims are $500 or less and these claims increase in frequency with the popularity of low copays, particularly in the Rx area.<br /><br />The HDHP has the ABILITY to hold down claims and future premiums. Whether it will depends on many factors including the popularity (or lack thereof) of these plans.<br /><br />Until cat plans (such as the HDHP) predominate over copay plans the bulk of a carriers claims will be small claims that are just as expensive to adjudicate as a larger claim. When claim volume subsides so will premiums.Anonymousnoreply@blogger.com