The question remains whether even State Farm's computers will prove to be enough to hold down or offset claims expenses.
Insurers, which make money from premiums and investing to offset claims payments, had a long run of poor underwriting years, which encouraged them to manage investments better.
The solid performance was achieved by selling some assets to offset claims from last year's devastating hurricane season, which cost Munich Re €2.3 billion ($2.9 billion).Drugs war?Schering, a German pharmaceutical company, said it would reject a takeover bid by Merck, its larger compatriot, claiming the price, which Schering valued at €14.6 billion ($17.5 billion), was too low.
But that has not been enough to offset claims from some of the company's insurance-debt hybrids and may not be enough to offset losses in stocks and corporate bonds.
Allstate, the second-largest home and auto insurer in the United States, said on Wednesday its quarterly earnings rose 70 percent as higher insurance rates helped offset claims from wildfires in California.
Insurers point out that some of the money paid by those trusts was likely owed to them to offset claims paid.
Without healthier people's premiums to offset claims submitted by the ill, insurers would have no choice but to raise rates for the sick.
This inevitably drives up premiums because insurers can't offset claims with payments from people who don't yet need protection.
"Otherwise the sick would be so expensive, they'd be impossible to insure". In a perfect world, premiums paid by younger, healthier people would offset claims by older, sicker people, and it would all balance out, more or less.
The widening of the sample to offset claims of interpretive bias links to a different criticism that questions the coherence and desirability of generalisable qualitative research.
