Competition Predicted for Insurance Business in Northern La.

Most homeowners in northern Louisiana won’t see their insurance rates increase and many will even see rate reductions, according to insurance industry experts.

Though all Louisiana homeowners will be charged a 15 percent assessment on their bills this year to subsidize the state-run Citizens Insurance Co., strong competition among private companies could keep rates down.

Allstate Insurance Co., the state’s second-largest insurer behind State Farm Insurance Co., has lowered its rates for most markets above Interstate 10, while consumers in New Orleans will see a 65 percent increase.

Homeowners insured by Allstate in Monroe, Alexandria and Shreveport will all see reductions of more than 9 percent.

“The trend has been to make rates in each area of the state commensurate with the risks,” said Steve Armstrong, a senior actuary with Allstate. “You’re going to see South Louisiana paying more of its fair share.”

In fact, when Allstate asked for an increase last month for its condominium line that would have been the same for every region, the Louisiana Insurance Rating Commission rejected the request.

“I understand the commission’s position, and that’s probably a more equitable way to handle it,” Armstrong said after the meeting. “We’ll bring back a revised filing.”

Morris Anderson of State Farm said homeowners living south of I-10 “will generally see higher increases than those in North Louisiana. That’s not surprising because of the greater risk in South Louisiana,” Anderson said.

Christine Berry, assistant professor of insurance studies at the University of Louisiana at Monroe and a rating commission member, said insurance companies “are going to try to write more aggressively in North Louisiana.”

“They are going to try to increase their concentration of business in the upper half of the state for obvious reasons,” Berry said. “They need balance in Louisiana to spread their risks.”

Information from: The News-Star, www.thenewsstar.com.