Mission Accomplished: Allstate Announces Calif., NY, NJ Rate Approvals

December 18, 2023

For California, the approved change was 30%, and New York and New Jersey came in 14.6% and 20%, respectively, Jess Merten, chief financial officer of The Allstate Corporation, said in a media statement about implemented rate changes for the month of November.

Allstate has been announcing implemented rate changes each month for the Allstate brand and the National General brand on a regular basis since the beginning of 2022.

Allstate expects to implement that Allstate brand rate hikes for California, New York and New Jersey in December with effective dates through February 2024.

According to Merten, these rates are expected to raise annualized written premiums by approximately $1 billion.

The announcement comes just a little over a week since Allstate Chief Executive Officer Tom Wilson, speaking at the Goldman Sachs Financial Services Conference, confirmed the prospect that the company would “move from just not taking on new business to having to say goodbye to some existing customers” if rate approvals in the three states didn’t come this year. During his conference presentation, Wilson put the rate need at +30-plus percent in California and New Jersey, and about 18% in New York.

“We don’t want to do that. I think the regulators would prefer we not do that. We’re not threatening anybody, we’re just saying we can’t afford to lose that much money in those three states,” he said at the conference, confirming a proposed course of action he and Mario Rizzo, President-Property Liability, first introduced during a third-quarter 2023 conference call.

Related article: What to Expect in Personal Lines: Regulatory Battles Ahead; Allstate May Drop Customers in 2024

According to the November rate implementation announcement, in advance of implementing the big three rate hike, from the beginning of the year through November, rate increases for Allstate brand auto insurance have resulted in a premium impact of 11.4%, which are expected to raise annualized written premiums by approximately nearly $3 billion. For homeowners, rate increases for Allstate brand have resulted in a premium impact of 10.1%, which are expected to raise annualized written premiums by approximately $1.0 billion.

A chart accompanying the November announcement breaks down auto and home insurance rate changes for the month, quarter-to-date, second-quarter and first-quarter, separately for Allstate’s Allstate and National General brands—showing both location-specific changes (rate changes by state as a percentage of prior-year net premiums in the state) and overall brand changes (rate changes as a percent of companywide prior-year net premiums). For auto, the chart show November location-specific changes of 7.9% for Allstate and 19.3% for National General.

Separately, on Friday, Progressive released its monthly report of financial results showing that the year-to-date combined ratio is 96—the company’s often-expressed target—through November, and 95 for the personal auto line alone.

Topics California New York New Jersey

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Latest Comments

  • December 19, 2023 at 1:44 am
    Observor says:
    It is vital that insurers are able to charge an adequate rate to stay in business. In a market with many players, consumers benefit from having many choices. Competition along... read more
  • December 18, 2023 at 2:08 pm
    Bob says:
    Raise a Billion? If anything, All State insured should shop! The company held the threat of Leaving Each State over the states, unless the state insurance boards approved th... read more

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