Getty
Images
A
stealth
inflationary
cost
is
biting
into
corporate
profits.
While
some
companies
are
now
seeing
lower
input
and
freight
costs,
one
expense
is
not
falling:
insurance.
In
its
earnings
report
Friday
morning,
Dow
component
Travelers
said
insurance
premiums
that
it
charges
are
still
soaring.
Premiums
on
business
policies
jumped
14%
in
the
last
quarter.
Consumers
are
feeling
the
pinch,
too.
Homeowner
renewal
premiums
spiked
21%,
while
those
for
auto
policies
jumped
17%.
Those
higher
prices
aren’t
deterring
demand,
though.
The
insurer
noted
“retention
remained
historically
high”
and
“new
business
increased
significantly.”
Although
rising
premiums
are
good
news
for
insurance
firms
such
as
Travelers,
they
are
bad
news
for
customers
—
whether
they
are
individuals
or
companies.
A
J.B.
Hunt
Transport
Services
tractor-trailer.
Luke
Sharrett
|
Bloomberg
|
Getty
Images
Soaring
insurance
costs
have
hit
companies
such
as
freight
shipper
J.B.
Hunt
hard.
During
Thursday’s
earnings
report,
it
said
it
took
a
hefty
$53
million
charge,
or
38
cents
per
share,
related
to
higher
insurance
and
claims
expenses
in
the
latest
quarter.
“As
we
reset
the
premiums
going
into
2024,
we
saw
upwards
of
50%
to
60%
increases
in
those
premiums,”
Chief
Financial
Officer
John
Kuhlow
told
analysts
during
the
company’s
earnings
call.
“And
so
when
we
talk
about
the
inflationary
pressures
that
we’re
seeing
in
2024,
it’s
mostly
around
our
premiums.”
He
added
that
claims
costs
are
“what’s
driving
a
lot
of
the
inflationary
pressures”
for
J.B.
Hunt.
CEO
John
Roberts
reiterated
those
sentiments.
“As
an
industry,
we
are
also
seeing
unprecedented
pressure
in
the
area
of
claims
cost
or
settlements,”
he
said.
He
added
that
“ultimately,
these
inflationary
costs
get
passed
on
to
customers
and
consumers.”
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