Insurance Profits — Is the Business Really All that Profitable?

From time to time AdvisorSmith looks at all things insurance. In this case it’s states where the business of insurance isn’t all that profitable. The company says whether a state is profitable or not depends on size and how competitive the market can be.

Competition — AdvisorSmith — said can be brutal.

In the case of smaller states, profits for insurers can be driven down by higher loss ratios. Some of the states on the AdvisorSmith’s least profitable list are among the PIA Western Alliance states. They are Montana, Nevada, California and New Mexico. Here’s the least profitable list:

1. Colorado

Average profitability 2014-2019: 0.2%

Written premium in 2019: $13.843,000

2. Montana

Average profitability 2014-2019: 2.6%

Written premium in 2019: $2.574,000

3. Nevada

Average profitability 2014-2019: 3.4%

Written premium 2019: 6,073,000

4. Georgia

Average profitability 2014-2019: 3.4%

Written premium in 2019: $22,393,000

5. Texas

Average profitability 2014-2019: 3.8%

Written premium in 2019: $60,458,000

6. California

Average profitability 2014-2019: 4.5%

Written premium in 2019: $82,478,000

7. Nebraska

Average profitability 2014-2019: 4.9%

Written premium in 2019: $5,131,000

8. Florida

Average profitability 2014-2019: 5.6%

Written premium in 2019: $55,288,000

9. New Mexico

Average profitability 2014-2019: 5.6%

Written premium in 2019: $3,671,000

10. Wyoming

Average profitability 2014-2019: 6.7%

Written premium in 2019: $1,261,000