The Progressive Corp.'s commercial auto rate hike in California was the most notable increase across the US in that business line during the third quarter, according to an S&P Global Market Intelligence analysis.
The state regulator in California signed off on Progressive's United Financial Casualty Co. unit request to boost its overall rate by 13.9% in the Golden State, which translates into a calculated premium change of $64.3 million. The rate change incorporates an increase of 10.7% for its liability coverage and a 27.0% hike in the physical damage coverage. United Financial underwrites the insurer's independent agent commercial auto business in the state.
In total, Progressive units received approval to increase their rate 15 times, with four of the additional rate hikes making the most notable calculated premium change list. Its Progressive Mountain Insurance Co. subsidiary boosted rates by 14.3% in Georgia, Progressive Preferred Insurance Co. hiked rates by 14.0% in Ohio, Progressive Southeastern Insurance Co. increased rates by 11.4% in North Carolina and Progressive Hawaii Insurance Corp. raised rates in Tennessee by 11.1%.
All figures in this analysis are based on as-reported numbers filed in the rate filings of each subsidiary in each state. The calculated premium change is not a final projection of the additional premium the insurer may receive in the upcoming year. The calculated premium change is reported by each insurer to reflect the most impactful premium changes based on the combined impact of the percentage change and the amount of business it affects. Changes to the insurer's policy mix or policies in force are not factored into the analysis.
US states employ a variety of rate regulation mechanisms, including prior approval, modified prior approval, file and use as well as use and file. Some states do not require explicit regulatory approval prior to insurers using new rates. This analysis is based on when rate filings are "disposed" by state regulators and does not take into account when those new rates became effective for new and renewal business. In some instances, a new rate may have been in effect prior to the month the filing was approved by the regulator.
Texas approves the most double-digit increases
State regulators in Texas disposed eight rate hikes of 10% or more for books of business with over $20 million of written premium, the most of any state during the third quarter of 2023. Old Republic Insurance Co. saw the largest percentage increase and will be boosting its rates by 58.5% in the Lone Star State. The new rate will be effective for both new and renewal business at the start of 2024 and will impact 200 policyholders of its Last Mile Delivery program.
Three other insurance subsidiaries operating in Texas received approval to boost rates by at least 25% during the quarter. Allstate County Mutual Insurance Co. increased rates by 45%; Liberty Mutual Holding Co. Inc.'s State Automobile Mutual Insurance Co. by 25.7%; and Nationwide Mutual Group's Allied Property & Casualty Insurance Co. by 25%.
Another Nationwide subsidiary, Nationwide Mutual Insurance Co., was granted permission to boost rates by 35.8% in California. The increase impacts about 640 policyholders and became effective Nov. 1.
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– Read about the recent performance of the US commercial auto insurance market.