State Farm secured four of the 10 most notable calculated premium changes by US private auto insurers in the first quarter, according to an S&P Global Market Intelligence analysis.
Subsidiary State Farm Mutual Automobile Insurance Co. secured a 24.9% rate increase in New York that led to a calculated premium change of approximately $679.8 million, the most impactful rate hike of the period. The rate change took effect April 29 for new and renewal businesses and impacts about 1.75 million policyholders.
The same subsidiary secured significant rate hikes of 11.9% in Minnesota, 11.2% in Colorado and 6.6% in Ohio. The rate change in Colorado has been in effect for over a year, while the increase in Ohio took effect in December 2023.
CSAA Insurance Exchange secured the second-most impactful rate increase of the list for the first quarter, in California. The 9.5% rate hike in the Golden State translated into a calculated premium change of $272.1 million, affecting over 1.76 million policyholders.
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.
Liberty Mutual gets big hikes in multiple states
Of the multiple private auto insurers receiving rate increases of more than 20% on books of business worth $20 million or more, Liberty Mutual received six such approvals. Half of these rate changes were in excess of 25%, with one reaching a high of 40% while another hit 30%. The insurer's 40% rate increase in Connecticut was the highest on the list, translating into a calculated premium change of $32.7 million and impacting over 33,000 policyholders.
Tesla Property & Casualty Inc., which started writing insurance business in Texas during the first quarter of 2023, made it into the list of notable approved rate changes for private auto carriers in the first quarter of 2024 with a rate change of 22%. This rate change in the Lone Star State went into effect in June 2023 for new business and in August 2023 for renewal business, translating into a calculated premium change of $11.6 million.
