Move aimed at improving margins and keeping pace with increases in loss costs
The Allstate Corporation is looking to pursue further rate increases in its auto insurance business.
In December 2023, Allstate implemented auto insurance rate increases of 30% in California; 14.6%, New York; and 20%, New Jersey. Building on this, the insurance giant plans to roll out additional hikes.
During Allstate’s earnings call, chief executive Tom Wilson said: “Since 2022, the Allstate brand implemented rate increases of 33.3%, which included 16.4% in 2023 and 6.9% in the fourth quarter, driven by the recent approvals in California, New York, and New Jersey.
“National General implemented rate increases of 10% in 2022 and an additional 12.8% in 2023. Looking forward, we will pursue rate increases in 10 states to improve margins and in other states to keep pace with increases in loss costs.”
Wilson also noted: “Expense reductions were initiated in 2019 as part of the transformative growth plan to become a low-cost provider of protections; being early in this effort helped offset the rapid inflation in loss costs.”
Meanwhile, it was reported that the increases in New York and New Jersey are not enough and are casting a shadow on the future of Allstate auto insurance policies in those states.
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