New Jersey's top auto insurer is dropping its rates for thesecond year in a row, bucking a trend among some of the largestcarriers who have requested premium increases or taken no action,according to insurance department figures.

Last week, New Jersey Manufacturers, the state's top insurer bynumber of policies in force, said it is reducing rates an averageof 5 percent on new and renewal business beginning today. Thecompany said policyholders will save about $34.6 million in thefirst year of the decrease alone.

The company added, however, that due to rising medical costs,the price for personal injury protection coverage will rise 2percent–meaning that some policyholders may see an increase as aresult.

A spokesman for the New Jersey Department of Banking andInsurance, Marshall McKnight, said that while the general trend inthe state is to see rates go down, some insurers have bumped ratesup.

However, Magdalena Padilla, chief administrative officer andvice president for the Insurance Council of New Jersey, said thenumbers were not indicative of any trends, but simply a reflectionof a very competitive marketplace.

“If it weren't for the efforts to reform the state's regulationsand spread the risk around, instead of concentrating much of therisk with one or two carriers, insurers would not have theconfidence to look at their business and reduce rates,” she said.“[New Jersey is now] a healthier, competitive marketplace wherecompanies can make these decisions.”

According to the state's figures:

o There were more than 5.3 million private autos written in NewJersey in 2007.

o NJM leads the total share by 15 percent, or 794,497vehicles.

o Allstate was next, with a 13 percent share.

o GEICO had 12 percent.

o State Farm was close at 10 percent.

o Liberty Mutual Group had a 7 percent share.

Of the top-five, only NJM had premium decreases in 2007 and sofar in 2008. GEICO Companies in New Jersey received decreases ofapproximately 4 percent in 2007; Allstate companies receivedincreases of 2.1 and 3.4 percent; and Liberty Mutual received anincrease of 0.6 percent. State Farm reduced rates between 2.9 and 6percent.

So far this year, Amica Property and Casualty Insurance Companyshowed the largest decrease at 6.7 percent. The company writes lessthan 1 percent of the state's market.

American International Group and Proformance Insurance Companyhad the highest increases, at 7 percent and 10 percent,respectively.

The high water mark for reductions appears to be in 2005, whenseven major companies announced they would reduce auto premiums toconsumers (NU Online, May 19, 2005).

According to figures compiled by the state insurance department,the number of rate reductions and dividends paid by insurers in thestate has increased from $155 million in 2003, the year the stateinstituted regulatory reforms, to more than $320 million in 2006.There have been more than $1 billion in reductions or payouts since2003.

The average premium rate also has declined from $1,152 in 2003to $1,107 as of June 2007. The state pointed out that the totalprivate passenger auto premiums paid in the state is up slightly,from $5.8 billion to $5.83 billion as of June 2007, while the totalnumber of vehicles insured has increased from 5.04 million to 5.26million.

Reforms have affected the number of auto insurance complaints aswell. They dropped from 5,770 in 2003 to 2,227 in 2007.

Most importantly, the number of carriers in the state has grownfrom 62 in 2002 to 67 in 2007.

Mr. McKnight said in an e-mail that nine new insurers haveentered the state since reforms were enacted.

The first was Mercury General, followed by GEICO, Esurance,AMEX, Progressive, Unitrin Direct, 21st Century Insurance (alsoknown as AIG Direct), Balboa Group (Balboa Insurance Company andMeritplan Insurance Company), and Personal Service InsuranceCompany. The last two entered the state in November of 2006.