Insurance bills
will drop for
homeowners

Insurers in Hawaii realized
a 36 percent profit in 1996, which
will bring reductions

By Craig Gima
Star-Bulletin

Consumers should be seeing lower homeowner and property insurance rates, or the state may step in and mandate rate reductions.

That's what Insurance Commissioner Rey Graulty said after an industry newsletter reported insurance companies in Hawaii have the highest profit margins in the nation for all lines of home and commercial property insurance.

"We'll work to bring down rates and see if they will voluntarily reduce rates, and if not, then we'll have to mandate new rate filings," Graulty said.

According to Brian Sullivan, who puts out the Property Insurance Report newsletter, insurance companies in Hawaii saw a 36.6 percent profit in 1996 on homeowners insurance. Most other states reported losses or low profits for the year.

One company, State Farm Insurance, has already reduced rates in Hawaii. It cut homeowners insurance rates 13.2 percent, or about $320 a year per homeowner, effective this week.

"The loss experience was more favorable than we expected, and we're able to pass that savings on to our customers in the form of lower rates," said Carolyn Fujioka, State Farm public affairs director.

Insurance companies in Hawaii have led the nation in profits since 1993, the year after Hurricane Iniki.

But in 1992, insurance companies reported a 714 percent loss.

"1992 was a horrible year for property insurance," Fujioka said. "I would say that's probably why there hasn't been a larger decrease."

In contrast, Florida, which suffered a 651 percent loss in 1992 because of hurricanes, was second in the nation with a profit margin of 26 percent.