Allstate Corp. annualized written premiums should rise about $1 billion on strong double-digit auto rate increases approved by regulators in California, New York and New Jersey, according to Chief Financial Officer Jess Merten.
The company is starting to implement Allstate brand auto hikes of 30% in California, 20% in New Jersey and 14.6% in New York while working with regulators “to enable us to offer protection to customers,” said Merten. Effective dates continue through February.
The company earlier said it would shed Allstate brand auto coverage in the three states next year unless regulators approved rate increases. “Let me be very clear, we are not going to continue to lose four digits in millions in those three states,” President and Chief Executive Officer Tom Wilson said recently. “We can’t afford to lose 20 cents on a dollar”.
Allstate narrowed its third-quarter applicable net loss to $41 million from a $685 million net loss a year earlier.
Merten said progress continues on the company’s plan to improve profitability: “Since the beginning of the year, 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 $2.97 billion, and rate increases for Allstate brand homeowners insurance have resulted in a premium impact of 10.1%, which are expected to raise annualized written premiums by approximately $1.03 billion.”
In November homeowners average gross written premium rose 12.6% from the prior-year period, said Merten, on implemented rate increases and replacement cost inflation.
The scope of rate hikes remained broad. During the first two months of the fourth quarter, Allstate implemented rate changes in 14 locations for its brand homeowners product and 12 locations for National General homeowners, exceeding totals for the third quarter.
Rates moved in 20 locations for Allstate brand auto product and 32 locations for National General brand auto in October and November, nearly exceeding third-quarter numbers.
Allstate’s estimated catastrophe losses failed to reach its $150 million reporting threshold for the second consecutive month in November, following a third quarter in which the carrier incurred $1.18 billion of catastrophe losses.
Underwriting entities of Allstate Corp. currently have Best’s Financial Strength Ratings ranging from A+ (Superior) to B (Fair).