State Farm: No New LA. Auto Policies

Indicating it is seeking a 16 percent rate increase for auto policies in Louisiana, State Farm Insurance Co. has stopped writing new auto policies in that state. The company estimates that the rate increase would generate over $150 million to offset losses. According to A.M. Best and the New Orleans Times-Picayune, the company ceased writing new auto business in Louisiana June 18; it currently has some 1 million auto customers in the state. A State Farm spokesman reported that the company lost nearly $200 million in its Louisiana auto business last year. The rate increase request is for the company’s Louisiana auto subsidiary, State Farm Mutual. Unprofitable business and inadequate pricing of policies were major factors in making the request. State Farm’s request is expected to be discussed during a July 17 hearing by the Louisiana Insurance Rating Commission (LIRC), which last month granted the company a 12 percent increase for its homeowners rates. About a third of Louisiana’s auto policies are written by State Farm. The state’s second largest auto insurer, Allstate, also requested a 19.9 percent increase on its homeowners and renters rates. The LIRC has deferred that request, saying Allstate needed to better justify another rate increase (it had been granted a 7 percent increase last November). The company plans to pursue the issue at the July 17 hearing.

Topics Auto Louisiana