After a second-quarter deficit, Allstate Corp. hikes auto insurance premiums
The insurance firm, with its headquarters in Northbrook, Illinois, reported during the second quarter that it had a combined ratio of roughly 108, which showed that it was not profitable.
Because of how well its homeowner’s insurance division performed, Allstate could report a positive net income for the first quarter of the year. As a direct consequence of this, the business announced that it will be “raising the degree” of rate increases for automobile insurance. According to the company, the houses line of business for Allstate incurred an underwriting loss of $186 million for the second quarter. It caused this loss by larger catastrophe and non-cat losses besides unfavorable reserve re-estimates from the prior year. The combined ratio for homeowners was 1069 in the second quarter of this year.
Personal autos handled $275 million of the increase in property liability reserves held by Allstate, while commercial vehicles handled $91 million of the increase in property liability reserves held by Allstate. During the second quarter, the property liability reserves held by Allstate increased by $411 million. Since Allstate quit the shared economy sector as a business, most of these increases in the property liability reserve were necessary because of this decision.
With a combined ratio of 107.9, they have linked it to an increase in both the number and severity of car insurance claims. Increased costs for used automobiles, parts, and labor, as well as an increase in injury claims because of medical inflation, more medical treatment, and attorney participation, all contributed to the severity of the lawsuits brought against the insurers. These factors all contributed to the severity of the lawsuits brought against the insurers. These aspects added to the seriousness of the lawsuits that were filed against the insurance companies.
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