Allstate will seek a 12.2 percent rate hike for homeowners insurance in California, the company said.
According to the Northbrook, Ill.-based insurer, the proposed hike would bring in $96 million in premium revenue and put the company in an improved position to deal with the volatility of natural catastrophes in the state.
Allstate has been conducting a major review of its catastrophe exposure across the country, which has resulted in, among other things, the nonrenewal of 30,000 policyholders in the New York metropolitan area.
In June, Commissioner John Garamendi issued a request to four major home insurers in the state--Allstate, Safeco, State Farm and Farmers--to justify their rate structure in light of a recent study finding that insurers in the state were paying out fewer dollars in claims compared to premiums.
Allstate Sacramento-area spokesman Rich Halberg said the rate hike came in response to that request.
He said that in the three years since the last rate increases, rating agencies have increased capital requirements and home values have soared.
The 2003 firestorms in Southern California cost the company about $300 million in insured losses, while the company is liable for about $800 million in insured loss damage through its participation in the California Earthquake Authority.
"This is one of the most catastrophe-prone states in the nation," Mr. Halberg said.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
