Acting Superintendent of Insurance Howard Mills announced that Allstate Insurance Company, New York’s largest auto insurer in terms of market share, has agreed to reduce their customers’ premiums, on average, by 3 percent. Allstate Indemnity Company, a smaller affiliated carrier, also agreed to an average 5 percent rate cut.
“Allstate joins eight other auto insurers who are reducing rates this year, saving consumers altogether more than $300 million,” said Mills. “This extraordinarily positive trend is the direct result of Governor Pataki’s successful efforts to crack down on insurance fraud and streamline the way in which claims are processed.”
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, 2005 for new business and Aug. 13, 2005 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. They are the ninth insurer to reduce their auto rates in 2005. The others are Amica Mutual, GEICO, MetLife, Nationwide, New York Central Mutual, Progressive, State Farm and Travelers.
The Insurance Department asked the state’s largest auto insurance carriers in letters issued in November 2004 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.