More on insurance costs and rents/Company comments/That 150 yen level again

I highlighted the jumps in auto and health insurance seen in yesterday's January CPI report. I'll add this, 'Tenants and Household Insurance' prices rose .7% in January from December and up by 4.1% y/o/y. They are up 6% annualized over the past three months. 

The 5 yr inflation breakeven yesterday closed at the highest level since early November at 2.36% but still remains in the 2.10-2.45% range seen over most of the past year. Helping to lift it was not just the CPI print but the rise in crude oil where the front month contract price is also at a level last seen in early November.

I'm going to reprint here again what JB Hunt said in its earnings call a few weeks ago on their ever rising insurance costs:

"On the topic of insurance, we have been routinely covering with you the inflationary cost headwinds we faced as a Company, as well as an industry in the areas of professional driver and non-driver wages, healthcare benefits, and equipment cost. However, as an industry, we are also seeing unprecedented pressure in the area of claims, cost, or settlements. As you saw in our release, we incurred $53mm of additional costs in the quarter, largely related to higher claims cost and exceeding coverage limits in certain insurance layers. And this, despite 2023 being the Company's best performance in history on safety, measured about having our lowest DOT preventable accidents per million miles. Yet our insurance rates continued to increase as the industry experiences higher verdicts, and as a result, higher litigation settlements. During verdicts in trucking cases where the verdicts exceed $1mm, have seen an 867% increase in the average size of verdicts from 2010 to 2018. This is according to the US Chamber of Commerce Institute for Legal Reform. Given that the majority of motor carriers in the industry carry only $1mm in coverage, just above the legal minimum $750,000 in coverage, it's the larger carriers who bear the brunt or disproportionate share of the escalating insurance and claims cost and ultimately these inflationary costs get passed on to customers and consumers." I bolded for emphasis.

I will add one more quote here from the Camden Property Trust call two weeks ago that I mentioned then, "Insurance represents 7.5% of our total operating expenses and is anticipated to increase by 18% as insurance providers continue to face large global losses and resulting financial pressures."