Recently, Mississippi Insurance Commissioner Mike Chaney said a rate request from Allstate for a 44 percent average statewide increase in homeowners insurance was not justified by actuaries.
Allstate said it found Mr. Chaney's comment perplexing, considering the fact that an actuarial report Allstate said was commissioned by the Mississippi Insurance Department (MID) found that the 44 percent hike was appropriate to reflect the company's increase in non-hurricane and non-wind-related claims and claim costs.
Commissioner Chaney has denied the rate filing, saying he would not approve a 44 percent increase without a court order compelling him to do so.
"We are disappointed the department continues to deny our request to charge a competitive price for the risks we face in Mississippi," Allstate spokeswoman Allison Hatcher said in an e-mail.
Commissioner Chaney said that one actuarial report did conclude the rate request was sound but he has another that concludes Allstate is not justified to receive more than an 18 percent rate increase.
"These companies know how to work the system--you put garbage in the front side and get garbage out of the back side," Commissioner Chaney told NU Online News Service. "But the fact is there is a lot more to approving rates, such as market disruption and unjustified use of certain models."
Commissioner Chaney said Allstate used a catastrophe model "that has never been proven to be correct."
The commissioner is also of the opinion that Allstate--based on the company's own comments--is attempting to price itself out of the Mississippi market.
The comment that remains stuck in Commissioner Chaney's craw is one made by George Ruebenson, former president of Allstate Protection, during an Allstate Corp. conference call to discus third-quarter 2009 results.
In speaking of Allstate's risk management program, Mr. Ruebenson said that if the company could not reduce the exposure through risk management, Allstate would "simply price our way out of the problem."
Mr. Ruebenson is now retired.
Ms. Hatcher said Allstate wants to "remain in a strong position in Mississippi. We want to be there for our customers. We want a strong insurance marketplace in Mississippi where consumers have choices."
Commissioner Chaney said he believes Allstate "is asking its policyholders to pay for some management mistakes."
"Consumers shouldn't have to be held accountable for that," he said.
Allstate had 12.6 percent of the homeowners multiperil insurance market in Mississippi, third to State Farm (25 percent) and Southern Farm Bureau (15.8 percent), according to Highline Data (www.highlinedata.com), part of Summit Business Media, which owns National Underwriter.