Multiple State Farm Mutual Automobile Insurance Co. subsidiaries across different states accounted for seven of the top 10 personal auto premium hikes secured in the second quarter, according to an S&P Global Market Intelligence analysis.
State Farm and its subsidiaries were approved for 42 rate increases during in the quarter, with State Farm Indemnity Co. receiving the go-ahead for a 23.1% rate increase in New Jersey. The filing reported a calculated premium change of $196.1 million which was the second highest for the quarter. The group also secured rate increases of 13.8% in Washington, 11.5% in Maryland, 10.3% in South Carolina, 9.3% in Virginia, 5.8% in Illinois and 5.3% in Georgia.
Interinsurance Exchange of the Automobile Club, a subsidiary of Auto Club Exchange Group, had the largest calculated premium change increase in the second quarter, at $225.1 million, after getting approval for a 6.9% hike. The rate change went into effect on Aug. 1 for both new and renewal business, impacting about 1.5 million policyholders.
The Allstate Corp. and Liberty Mutual Holding Co. Inc. also had notable increases. Allstate secured a 15.8% rate increase in Georgia, reporting a calculated premium change of $179.9 million, while Liberty Mutual reported a calculated premium change of $137.6 million after securing a 25% rate increase in California.
All figures in this analysis 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, and 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.
California and Connecticut rate increases
Of the 15 states that implemented a combined 24 rate increases of 20% or more for company books of business worth at least $20 million, California was responsible for five — more than any other state. Connecticut signed off on four rate changes. No other state approved more than two.
A CSAA Affinity Insurance Co. 40% premium hike in California was the largest percentage approval granted across all states. The rate increase affects almost 25,000 policyholders with a calculated premium change of $23 million.
Texas-based Loya Insurance Co. received approval for a 33.8% increase in Nevada, the second-highest percentage increase approved in the second quarter. Liberty Mutual received approval for a series of rate increases, with six exceeding 20%. The most significant of these was a 25% increase in California.
