I agree with most that Johnno had to say.
9/11 incident was an excuse in my opinion to raise rates, but I did go to meetings prior to that event and the HIH problems, where they stated (rightly or wrongly) that rates had to rise due to declining profits and increasing claims, 9/11 was obviously the perfect excuse to raise rates and the loss of HIH took away competition from the market..
The high street insurance companies are however at the mercy of the reinsurance industry, who ultimately set the rate. It?s not dissimilar to a bookie who will take on a portion of the bet/risk and look for another party to cover the remaining potential loss.
Because of this the insurance industry is a global market with each company taking on a portion of the risk, in that way local companies find themselves exposed to claims resulting from 9/11 and other disasters.
Given time (years) it will hopefully all settle down. If enough people self insure (do your own risk management there) or just shop around they will have to reduce rates or at least not increase them for a long period of time.
You can and insurance companies do blame the lawyers but they are really IMO only pushed by public sentiment and expectations, if you find yourself in a position were you are totally or almost totally disabled with no visible means of support apart from state benefits you will try and find someone to blame. Enter the "ambulance chasers"
Some people will slip in a shopping centre and break a finger nail or even wreck their back whilst bungee jumping and blame their own incompetence others look for compensation.
Dave
