The four largest U.S. personal auto insurers received approval for substantial rate increases during the last six months of 2021 as the industry continues to try to offset rising loss trends.
Of those big four auto insurers, hikes approved in the second half of 2021 for the subsidiaries of Berkshire Hathaway Inc.'s GEICO Corp. could potentially lead to the largest calculated premium gain, with an estimated increase of $1.06 billion, according to an S&P Global Market Intelligence analysis.
Analysis limited to private passenger auto and personal auto combination rate filings submitted to regulators after Jan. 1, 2021, and disposed between July 1, 2021, and Dec. 31, 2021. Overall rate impact is manually calculated based on the aggregated written premium change from all rate filings during the period as a percentage of the largest rate filing written premium for each filer in the group in every state. Overall rate impact for insurance group in some states may be higher or lower than each approved change during the period. Rate filing information is sourced from the disposition table of the System for Electronic Rate and Form Filing Documents. |
New rates approved in the second half of 2021 are expected to boost The Progressive Corp.'s personal auto premiums by $363.0 million. The Allstate Corp. and the affiliates of State Farm Mutual Automobile Insurance Co. stand to see their premiums climb $351.5 million and $321.9 million, respectively, from rate hikes in the period.
Most impactful hikes for GEICO took place in the South
Roughly 69% of GEICO's calculated premium increase occurred in the South, with five states having at least a double-digit overall rate increase. The most impactful increase for GEICO in the South occurred in Texas, with an overall rate impact of just under 10% that is expected to boost the insurer's premiums by $301.8 million. An overall rate increase of 13.1% in Virginia looks to raise premiums by $130.9 million for GEICO, while a 16.1% rate hike in South Carolina could boost them by $100.6 million.
The most impactful increase in the region for both State Farm and Allstate occurred in Georgia, where calculated premiums could increase by $83.4 million and $40.6 million, respectively.
Pennsylvania sees biggest increases in Northeast
The most impactful rate changes in the Northeast for two insurance groups occurred in Pennsylvania. Progressive's overall increase of 7.8% in the Keystone State could generate an additional $84.9 million in premiums, while GEICO boosted its overall rate by 17.0% in the state for an estimated increase of $80.6 million in premiums.
An overall rate increase of 22.6% for GEICO in Maine is the largest percentage increase in this analysis. That hike could lead to a premium bump of $20.7 million.
Auto rates climb across Midwest
Progressive received the most impactful rate increases in the Midwest during the second half of 2021. Its overall rate hike of 7.1% in Minnesota could raise its premiums by $53.9 million.
The Midwest's second-largest rate increase occurred in Michigan. State Farm raising rates by 2.8% there could translate to an additional $41.8 million in calculated premiums.
GEICO receives most impactful increase in the West
GEICO's calculated premium increase of $60.5 million, an overall rate increase of 6.3%, in Arizona looks to have been the most impactful rate increase to occur in the West during the period.
The largest overall percentage increase in the region took place in New Mexico, where State Farm boosted its rates by 21.2%. The insurer expects to receive an additional $2.4 million there.
During the second half of 2021, Allstate actually lowered rates in two Western states, Nevada and New Mexico.
