A Conversation with Caldwell Insurance: Loss Ratio + Loss Ratio and Insurance Company Profitability (Sonora, CA)

And once again, we talked earlier about an insurance company. They need to make a profit, right? At the end of the day, it’s not a non-profit business. So, for every dollar that they’re paying out in claims, they need to make sure that they’re taking a dollar in on the premium side. And in this article, it goes in depth here, and they were talking about the loss ratio, which is, once again, the money that’s coming in versus the money that’s going out in claims.

And they shared some interesting figures here. They said that in 2022, so last year, their loss ratio, they were at 108.8%. So we round up to 109%. So, for every dollar that they were taking in, they were paying out one dollar and nine cents.


And then, in one of their other markets where they operate, they were at a loss ratio of 105.3%. So what these companies are doing, from their perspective, is stepping out of the marketplace and going until we can figure out where the dust is going to settle and how we can charge rates.

It’s almost created this perfect storm or this vacuum in the state of California because we all know that when the private sector kind of steps out of things and there’s no competition in the private sector, what are we left with?

We’re left with this insurance pool, which we referred to as the California Fair Plan, which everyone says is not fair, and they’re absolutely accurate.

How does California, and the fact that they’re pulling out of California… where are they going? How does California compare to other states? Because we’re not the only state that has catastrophic wildfires. We’re not in Florida. They have flooding; they have hurricanes. The South has hurricanes. You’ve got tornadoes in the Midwest. We’re not the only state with these types of issues.

Tune in for Part 9 of the State of Fire Insurance in Tuolumne County, where Justin and Ryan discuss the Insurance Industry in California Compared to Other States!

We’d be happy to review your insurance coverage options with you! Give us a call at (209) 532-5102 or visit https://caldwell-insurance.com.