A stealth inflationary cost is biting into corporate profits.
While some corporations are actually seeing decrease enter and freight prices, one expense is not falling: insurance coverage.
In its earnings report Friday morning, Dow element Travelers mentioned insurance coverage premiums that it costs are nonetheless hovering. Premiums on enterprise insurance policies jumped 14% within the final quarter. Consumers are feeling the pinch, too. Homeowner renewal premiums spiked 21%, whereas these for auto insurance policies jumped 17%.
Those increased costs aren’t deterring demand, although. The insurer famous “retention remained traditionally excessive” and “new enterprise elevated considerably.”
Although rising premiums are excellent news for insurance coverage corporations like Travelers, they’re dangerous information for purchasers – whether or not they’re people or corporations.
J.B. Hunt Transport Services President Shelley Simpson lately mentioned the business was in the midst of a “freight recession.”
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Soaring insurance coverage prices have hit corporations like freight shipper J.B. Hunt laborious. During Thursday’s earnings report, it mentioned it took a hefty $53 million cost, or 38 cents per share, associated to increased insurance coverage and claims bills within the newest quarter.
“As we reset the premiums going into 2024, we noticed upwards of fifty% to 60% will increase in these premiums,” CFO John Kuhlow advised analysts in the course of the firm’s earnings name. “And so after we speak in regards to the inflationary pressures that we’re seeing in 2024, it is largely round our premiums.”
He added that claims prices are “what’s driving loads of the inflationary pressures” for J.B. Hunt.
CEO John Roberts reiterated these sentiments.
“As an business, we’re additionally seeing unprecedented strain within the space of claims cost or settlements,” he mentioned. He added that “finally, these inflationary prices get handed on to prospects and shoppers.”