Learning from history

In a 1948 speech to the British House of Commons, Winston Churchill said that “those that fail to learn from history are doomed to repeat it.” He was paraphrasing George Santayana, a Spanish-American philosopher and essayist. 

For 29 regular and special legislative sessions since the Medical Malpractice Act was signed into law in 1975, certain factions of the Louisiana Legislature have failed to learn from history. 

Governors Edwin Edwards, Dave Treen, Buddy Roemer, Mike Foster, Kathleen Blanco, Bobby Jindal, John Bel Edwards, and Jeff Landry all enacted bills claiming to be reforms. Every governor of the state of Louisiana has signed some tort reform measures into law since 1975.

Following insurance companies and the commissioner of insurance — with the trucking industry, the Louisiana Association of Business and Industry, and other business interests lobbying their bills — the legislature has decided once again to attempt to reduce insurance rates through tort “reform.”

I thought it was important to provide some ammunition when you have discussions with friends, families, co-workers, and elected officials about this issue:

Property casualty insurers made a record $169 billion in profit in 2024.¹ The profit amounted to a 90% increase from the previous year and a 333% increase from 2022. These record profits were made in a year in which insurers raised auto insurance rates by an average of 26%, with some states seeing increases of more than 40%. 

Insurers also raised homeowners’ insurance rates by double digits. Overall, premiums collected by property/casualty insurance companies totaled more than $1 trillion per year for the first time.²

Progressive Insurance reported a first quarter net income of $2.33 billion, more than five times its net income from the same period a year ago.³  

Allstate Insurance reported $1.2 billion in net income in the first quarter of 2024.⁴ GEICO had record profits of $5.3 billion in 2023.⁵ State Farm Mutual Automobile Insurance Co.’s net worth jumped to $134.8 billion in 2023 from $131.2 billion in 2022.⁶

In 2023, property and casualty insurers made $73.9 billion in investment income.⁷

When you are speaking with others, it may also be helpful to point out statements from proponents of tort “reform” that sup-port the arguments that such legislation fails to reduce rates. For example:

• “[T]he insurance industry never promised that tort reform would achieve specific premium savings.”⁸ — March 2002 American Insurance Association press release. 
• “[M]any tort reform advocates do not contend that restricting litigation will lower insurance rates, and I’ve never said that in 30 years.” —   Victor Schwartz, general counsel for American Tort Reform Association.
• “We wouldn’t tell you or anyone else that the reason to pass tort reform would be to reduce insurance rates.”—  Sherman Joyce, president of American Tort Reform Association.
• “I’m telling you it’s going to lower rates … if we get past this year and a year from now the rates aren’t down, I’ll be grabbing a tiki torch right with you going to the Capitol saying, ‘this didn’t work.’” —  Stephen Waguespack, LABI president, after Governor John Bel Edwards signed a package of tort reform bills into law, June 17, 2020.⁹
• “Louisiana is open for business, and we want to invite you back. Our Legal Reform Coalition has spent the last two years working to bring real changes to the state that will improve our business and legal climates … for decades, Louisiana has been a poster child for lawsuit abuse … [we had] one goal — comprehensive, common sense legal reform to limit frivolous lawsuits.” — An August 10, 2020, letter from LABI and its Legal Reform Coalition, National Federation of Independent Business, American Builders and Contractors of Louisiana, Pelican Institute for Public Policy, Independent Insurance Agents & Brokers of Louisiana, American Sugar Cane League, Louisiana Mid-Continent Oil and Gas Association,  Louisiana Home Builders Association, Louisiana Bankers Association, and Louisiana Oil & Gas Association. 
• “The [tort reform] package will lower auto insurance, in my opinion, 25%.” — Commissioner of Insurance Jim Donelon, May 2020, House Civil Law Committee. 

In 2024, the same people who signed that 2020 letter announcing that historic tort reform had been accomplished declared that it was just watered down tort reform and not “real” tort reform. 

These facts speak for themselves, and LAJ will continue to be the voice for the citizens of our state at the Capitol. 

Endnotes

1. “First Look: 2024 US Property/Casualty Financial Results,” AM Best, March 18, 2025; “Viewpoint: As Insurance Losses Outpace Premiums, State Regulators Play a Critical Role,” Insurance Journal, November 26, 2024.
2. “US homeowners rates rise by double digits for 2nd straight year in 2024,” S&P Global, January 21, 2025.
3. Investopedia. April 2024.
4. Insurance Business, May 2024.
5. The New York Times, February 2024.
6. Repairer Driven News, March 2024.
7. “US P/C Insurers Hit Record Investment Income in 2023,” Insurance Journal, May 31, 2024.
8. “Industry Insiders Admit — And History Shows: Tort Reform will Not Lower Insurance Rates,” Americans for Insurance Reform, (2003, https://centerjd.org/air/pr/Quotes.pdf).
9. Ballard, Mark, “A lobbyist said he’d grab ‘a tiki torch’ if auto rates increase.  They did, and this group responded,” The Advocate, June 17, 2021.