I have worked in the insurance industry since 1987 and have owned my own brokerage for the past 5 years. Most insurance companies made their money, not by premium paid to them by the insured because most of that was paid out in claims, but by investing that premium in the stock market. Most companies have not faired very well in the last 2 years. In the last month four of my companies have decided to pack it up because they werent making any money. I have even heard rumours that State Farm, who insures 35% of the country, might close down their personal lines division (homeowner & auto polices). The entire insurance industry will be taking increases to compensate for the amount of money that is being lost. This is just a view from one of the major industries of the US and it is not a pretty sight.