Insurance got a *lot* more expensive
Confirms what we already knew, but the rate hikes appear to be tapering. Plus, another incredible thing about YouTube
insurance premiums grew to the moon (and it shouldn’t be a secret why)
loss-ratios are improving (which is good news for the rest of us)
A bonus fact about YouTube: it’s just everywhere for everyone
👉👉👉Reminder to sign up for the Weekly Recap only, if daily emails is too much. Find me on twitter, for more fun. Insurance got a *lot* more expensive
Just to confirm what everyone knew to be true: insurance got a lot more expensive recently, and it happened very quickly.
$1 Trillion in premiums
For 2024, insurers broke a record for total P&C premium, surpassing $1T in direct premiums. It was the personal lines, especially, that took off like a rocket ship:
Nearly $360M in private auto, and $170M in homeowners, reflecting ~13% and 11% yoy growth, respectively.
Going back to 2020, direct premiums for personal-lines P&C have grown a staggering ~47% (which is obviously much more than inflation).
What does it all mean?
Well, for one thing, it’s a good year for insurance agencies that simply clip a percent off the premium, and then hand off the risk the actual insurer. Everyone needs to insure their home and their car, so there’s not a whole lot that consumers can do, but grit and bear it.
But mostly, it’s consistent with my priors that steep increases in the cost of labor and capital had to be passed on to consumers sooner or later.
Regulators clearly applied pressure in the early years—hence the relatively muted increase 2020-22—but once enough insurers started pulling out of markets, regulators presumably began to throw in the towel on their price controls.1 The shortages they were causing weren’t helping matters.
Loss-ratios got better, obv (and that’s good for the rest of us)
But, the good thing (for insurers) is that when you charge more premium, your loss-ratios go down:
Loss ratios peaked in 2022, and began to decline substantially in 2023.
Long ago, Random Walk predicted the insurance premium hike was coming to an end (because the catch-up appeared to be all caught up, or close to it).
So far, I’ve been mostly right about that, but we shall see.
YouTube is under-monetized (reprise)
Finally, just because I missed this the last time around, YouTube is apparently the most watched thing on TV:
YouTube captured 11.6% of TV viewing time, more than any other platform.
To reiterate, YouTube, the streaming video platform, is now the most watched thing on TV. More than NBC, or Cable channels, or any of that.
YouTube took the lead in Nielsen’s February 2025 Media Distributor Gauge, gaining 2% over January to capture 11.6% of time spent watching TV across the month. This marks YouTube’s best share of TV to date, and is the second time the pure-play streamer has topped the Media Distributor Gauge since Nielsen began tracking in November 2023.
This is apparently the second time YouTube has pulled this off.
The demographic skew is also interesting:
Older folks have 2xed their share over the past two years.
Seniors now represent a similar share of YouTube’s audience (on TV) as kids aged 2-11. Supposedly.
Wild stuff. Nothing bad happens after new media get unleashed into the wild, right?
Other links
US grids target higher voltage transmission. Higher voltage transmission will help alleviate curtailments, but we still lack some of the key hardware (e.g. transformers) to make this work.
The data center boom is coming to rural America. Most interesting nugget is the duration mismatch between the hyperscaler’s purchase commitments and the useful life of all this energy.
Women are giving up on marriage. Woman are attracted to status and power, and in a more feminized society, women have an increasingly large share of both, relative to men. At a certain point, it’s just math. Status hierarchies have evolved more quickly than nature is willing to adapt (and it appears to have made everyone unhappy, perhaps women especially). The extreme radicalization of single women, however, is a bit more unexpected (but no less true).
CBO’s Long Term Budget Outlook. Probably best not to look.
The era of cheap stuff was already ending. One way of looking at this is that we’re borrowing from future generations so that we can consume more Chinese goods today. I get that *not* doing that will hurt, and I’m not sure that buying U.S. stuff instead is necessarily the solution (so much as just consuming what we can actually afford, which when it comes to healthcare, is much, much less), but stop pretending like the status quo is all peachy keen.
Dutch Pensions to invest €100B in risky assets boosting Europe’s defense efforts. Europe shouldering a greater share of its defense spending is an early policy victory for Trump. I’m not sure that I’m really buying it, because I don’t think Europe can afford it. See also Norway urged to drop ban on investment in defense companies.
Previously, on Random Walk
Volatility begets volatility, and other sundries
Vol begets vol (and the analysts get it wrong, a lot)
Healthcare makes all the jobs . . . but maybe manufacturing too? Other labor market desiderata
healthcare jobs replaced all the manufacturing jobs (much to the benefit of women and aides)
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Compare with the smoother increase in commercial lines, where regulators are less likely to intervene, and therefore the markets function a little better (although there are issues with these markets, as well):
Commercial premium growth actually began to taper, somewhat in 2024.