The insurance industry can no longer blame rising premiums on “frivolous” or “jackpot” claims, according to new reports of record-shattering profits.

Industry analyst A.M. Best Co. confirms that property casualty insurance companies – including medical liability insurers and auto insurers – raked in a record $41 billion in earnings in 2004. P & C companies were “in the black” even before counting their earnings from investments in bonds and the stock market – for the first time since 1978.

This new profit data comes on the heels of yet another year of runaway earnings in 2003, when the industry posted a $29.88 billion profit – a 900% increase over 2002 earnings.

Even worse, A.M. Best Co. attributes this profit explosion to years of insurance companies raising rates on consumers, then cutting back on their coverage and benefits. You – the customer – are paying the price out of your own pocket.

Individuals and business owners have no choice but to pay higher premiums for less coverage because many lines of insurance – including medical liability insurance – is regulated under a loose system of review called “file-and-use.”