State Farm secured five of the 10 most notable calculated premium changes by US homeowners insurers in the second quarter, according to an S&P Global Market Intelligence analysis.
Similar to the previous quarter, all five rate increases were secured by the subsidiary State Farm Fire and Casualty Co., including the most significant rate hike on the list: an 11.3% rate increase in Minnesota that led to a calculated premium change of $108 million. The rate change took effect July 15 for new business and is set to take effect Sept. 1 for renewal business, impacting just over 600,000 policyholders.
The second most substantial rate increase was implemented by the same subsidiary in Missouri: a 12.5% rate hike resulting in a calculated premium change of $82.4 million. The subsidiary also secured rate hikes of 17.9% in Washington, 9.7% in Oklahoma and 16.5% in Arizona. These rate changes have already gone into effect for new business and are set to take effect in August and September this year for renewal business.
The Travelers Cos. Inc. subsidiary Standard Fire Insurance Co. had the third most significant rate increase of 15.3%, which was granted in California, leading to a calculated premium change of $70.8 million which went into effect in May this year. California also granted some other notable rate approvals: a 6.9% increase to CSAA Insurance Exchange and an 8.0% hike to Farmers Insurance Exchange.
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.
Liberty Mutual continues to raise rates
Multiple homeowners insurers received rate increases of 25% or more on books of business in excess of $20 million in the second quarter of 2024. Liberty Mutual Holding Co. Inc. received such approvals in six instances, the largest number for any insurer within this analysis. The group also had the highest number of rate increases approved this quarter at 117. The calculated premium change listed for the approved filings aggregates to about $603.3 million, the largest of this quarter.
The insurer's 35% rate increase in Tennessee was the fifth-highest on the list, translating into a calculated premium change of $16.3 million and is reported to impact around 21,000 policyholders.
– Learn about US Homeowners' insurance rate changes and loss ratios in 2023
– Download a template to analyze rate changes for selected entities, states or type of insurance over a selected period.
American Modern Property & Casualty Insurance Co., a subsidiary of Munich Re, received the largest rate change of the second quarter this year, among the subset of filings reviewed. The 56.4% rate hike granted by California will go into effect Oct. 1 for new and renewal businesses, affecting over 17,000 policyholders.
