Allstate and GEICO will each take nearly $200 million in additional premium nationwide as a result of the auto insurance rate hikes implemented in April, according to an analysis by S&P Global Market Intelligence†
The analysis, which is based on publicly available rate applications filed with state insurance regulators, found that Allstate had received approval for 22 rate increases in 13 states. Combined, the increases could potentially increase the carrier’s calculated premiums by nearly $195 million, according to S&P Global.
GEICO was a close second and was expected to realize an additional $193.4 million in premiums through 10 increases approved in the month. Georgia and Arizona drivers pay most of the additional premium, calculated at $119.7 million and $58.5 million in those states, respectively.
The “most impactful” state premium increase will be felt in Louisiana, where about 1 million State Farm policyholders will pay an additional $95.3 million, thanks to an approved 7.2% increase, S&P Global said.
In Texas, State Farm was allowed to raise its rates by 9.7%, raising an additional $64 million.
S&P Global found two double-digit percentage increases at the state level, both attributed to Allstate. In Louisiana, drivers will see a 14.9% increase, for a $51 million increase in premiums collected. And in Virginia, a 12.1% increase will result in an additional $42.1 million premium for the carrier.
For example, Allstate has made no secret of its intention to increase auto insurance rates in 2022 as it responds to an increase in claims for physical damage and personal injury.
Mario Rizzo, CFO of Allstate, told investors on April 29 that the airline had increased its fares by an average of 9.8% in March at 15 locations and had made “53 fare increases at an average of about 8.2% at 41 locations since the end of the year.” beginning of the fourth quarter of 2021.”
“These locations will represent approximately 62% of Allstate brand auto premiums in 2021,” said Rizzo. “The increase in total Allstate branded auto insurance premiums of approximately 6.5% implemented over this six-month period will be earned this year and through 2023.”
The latest tariff increases build on the increases approved in the second half of 2021. According to S&P Global, the rate increases approved for GEICO are expected to generate $1.06 billion in additional premium during the period, while Progressive, Allstate and State Farm are expected to realize increases of $363 million, $351.5 million and $321, respectively. .9 million.
Not all airlines raise fares, S&P Global found. In Michigan, Pioneer State Mutual Insurance Co. approved a 4.7% rate cut, reducing expected premiums by $5.6 million. The new rate will affect approximately 61,000 policyholders from July 1.
S&P Global notes that states use a variety of rate regulation mechanisms, such as pre-approval, modified pre-approval, file and use, and use and file. The form filing laws regulate the type of policy making regulations used by the state and may not require explicit approval by state regulators before using the new rate, it said.
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Chart by S&P Global Market Intelligence. Used with permission.