SubparUser

So I am not an actuary so I'm not super familiar with all the rules, but i believe there isn't a hard and fast profit rule for auto insurance. Now that being said, a lot of the times we use the observed loss ratio as rational for changes to plans so if we were 'too profitable' i would imagine it would open us up to a lot more scrutiny from the DOIs.

This pretty of close, but a little off. You are correct that they are heavily regulated because auto insurance is mandated by law, but mainly pertains to what they are allowed to charge for. In the US, each state has a DOI that checks over models that car insurance companies use to charge people. There are a lot of rules about what can and can not be rated on. T̶h̶e̶r̶e̶ i̶s̶n̶t̶ r̶e̶a̶l̶l̶y̶ a̶ l̶e̶v̶e̶r̶ f̶o̶r̶ 'I̶ w̶a̶n̶t̶ t̶h̶i̶s̶ m̶u̶c̶h̶ p̶r̶o̶f̶i̶t̶' o̶t̶h̶e̶r̶ t̶h̶a̶n̶ t̶h̶e̶ b̶a̶s̶e̶ r̶a̶t̶e̶ t̶h̶e̶y̶ c̶h̶a̶r̶g̶e̶. Edit: (The comment below me is correct. I was getting a little hand-wavy. In general every part of a insurance plan will be scrutinized and has to be well supported. Insurance companies need to justify why there is a surcharge for some characteristic of a policy, this is what stops companies from just raking in money) They have to make an argument to the DOIs for why their base rate is what it is, so they cant really increase it for no reason.

The other comment in response about loss ratio is correct

I work in DS for a car insurance company, from the inside the returning of premium seems more of a 'pr goodwill' type of thing than anything else. As soon as one company did it, they sort of all wanted to follow suit in order to preserve optics.

There really isn't a limit to profits such as, 'we can only make $500 off of this policy anything over that we would have to refund'

Now that I noticed that this is aimed at young professionals in an effort to guide their career choice, this article seems even more disingenuous.

I'm a little confused on the goal of this 'analysis'. It appear that time spent in school/school cost isn't even considered. I'm not that familiar with bloomberg articles so I can't speak to their normal quality, but this seems like a filler article