State Farm Mutual Automobile Insurance Co. was the biggest beneficiary of California regulators approving more personal auto rate hikes in the first quarter, according to an S&P Global Market Intelligence analysis.
California regulators signed off on 15 auto rate increases in the first quarter, with the most significant one being the hike filed by State Farm. The filing listed a calculated premium change of $263.8 million based on a 6.9% increase on $3.82 billion in premiums. This rate change is planned to take effect on May 15 for both new and renewal business, affecting about 3.7 million policyholders.
Overall, State Farm and its subsidiaries received approvals for 65 rate hikes across 29 different states during the quarter. The aggregate of the calculated premium change for the filings is $2.60 billion. This is the fourth-consecutive quarter in which the calculated premium change from the group's approved rate filings exceeded $1 billion.
The Allstate Corp. obtained approval for 83 rate increases across the US in the quarter, with an aggregate calculated premium change of $1.05 billion.
Meanwhile, regulators across the US signed off on rate hikes for The Progressive Corp. and United Services Automobile Association with aggregate calculated premium changes of $929.9 million and $650.7 million, respectively. During its first-quarter earnings call, Progressive CEO Tricia Griffith noted that the insurer
 | – Read more about Allstate pursuing rate hikes in California. – Download a template to analyze rate changes for selected entities, state or type of insurance over a selected period. |
Progressive decreases rates in Michigan in Q1
The two largest private auto underwriters in 2022 indicated that some of their rates will be decreasing in Michigan. Regulators there approved the two largest decreases for Progressive during the quarter. According to a rate filing, the savings are from a 2020 law requiring changes to insurers' personal injury protection (PIP) rates. In aggregate, the calculated premium will decrease by $51.6 million for the group.
State Farm Mutual Automobile Insurance Co. showed a calculated premium decrease of $20.6 million in Michigan due to the PIP rate reduction requirement, according to its rate filing.
All figures listed are based on as-reported numbers filed in the rate filings of each subsidiary in each state. The calculated premium change is not a final projection of the additional premium the insurer may receive in the upcoming year. The calculated premium change is reported by each insurer to reflect the most impactful premium changes based on the combined impact of the percentage change and the amount of business it affects. Changes to the insurer's policy mix or policies in force are not factored into the analysis.
US states employ a variety of rate regulation mechanisms, including prior approval, modified prior approval, file and use as well as use and file. Some states do not require explicit regulatory approval prior to insurers using new rates. This analysis is based on when rate filings are "disposed" by state regulators and does not take into account when those new rates became effective for new and renewal business. In some instances, a new rate may have been in effect prior to the month the filing was approved by the regulator.
