Allstate Cuts N.Y. Auto Rates
NU Online News Service, May 3, 3:12 p.m. EDT–New York Acting Superintendent of Insurance Howard Mills announced yesterday that Allstate Insurance Company had agreed to reduce customers' premiums, on average, by 3 percent and Allstate Indemnity Company, a small affiliated carrier, agreed to an average 5 percent rate cut.
Mr. Mills said that by accepting the reduction, the state's largest auto carrier "joins eight other auto insurers who are reducing rates this year, saving consumers altogether more than $300 million."
The acting superintendent attributed the price reduction trend to a focus by Republican Gov. George Pataki's administration "to crack down on insurance fraud and streamline the way in which claims are processed."
He said Allstate's New York customers will cumulatively realize savings of $50 million this year, with $45 million in rate reductions going to Allstate Insurance Company policyholders, who represent more than 97 percent of their customers, and the balance being realized by those who are insured through the Allstate Indemnity Company.
The rate schedule for both companies takes effect on July 4 for new business and Aug. 13 for renewals.
Allstate's two companies insure about 1.5 million private passenger vehicles in New York State, representing almost 17 percent of the total market. Allstate Insurance Company's rates have remained steady since early 2003. Allstate is the ninth insurer to reduce auto rates in 2005. The others are Amica Mutual, GEICO, MetLife, Nationwide, New York Central Mutual, Progressive, State Farm and Travelers.
In November 2004, the insurance department sent letters asking the state's largest auto insurance carriers to meet with the agency's senior management team to discuss possible rate reductions. The correspondence cited compelling industry data indicating that New York auto insurers' losses had dropped substantially between 2002 and the third quarter of 2004.
Discussions with other carriers are continuing the department said.
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