Recent economic turmoil has many Insured’s wondering, “Will we see property and casualty insurance premiums rise as a result?” What about the Government’s recent $85 Billion rescue of AIG? Throw on top of that, the hurricanes, and are we not headed for higher premiums nationwide?

According to Jessica Dickler, of CNNMONEY.com, “… experts are quick to point out that the financial woes facing AIG shouldn’t have any impact on the company’s policyholders. In addition, while the hurricanes may lead some insurers to raise their premiums, or the fee you pay for insurance coverage, most industry watchers think the increases will be modest.”

In 1999 and 2000, while the Dow was dropping, insurance companies were feeling the effects. While claims are important, insurance companies for years have made their profit off of the investment of its customer’s premiums, not necessarily by keeping claims down. Low claims were always a benefit, not always a necessity.

By the fall of 2001, insurance companies knew premiums needed to be increased or they were headed for even more precarious times, however, no company wants to be the first to raise their premium. Immediately after the tragedy of the 9/11 attacks, it became obvious to the insurance industry that increases were imminent and every company took one.

Now, years after the 9/11 attacks, we’re in a “soft market”, where premiums are at or near a low. Rumbling and speculations among insurance companies are starting. With the economic turmoil, Government bailouts, and natural disasters, increased premiums are almost certain. How much and how sustained is up for debate. Insurance Companies usually have enough surplus to “weather the storms”, no pun intended. Yet, how many storms, and especially at a time of economic turmoil like we’ve not seen before in many years, can the industry withstand? Higher premiums are almost certain!