No Rate Increase For Allstate In Mississippi

Published: Tue 12 Jan 2010

Wendy Blair

Allstate Property and Casualty Insurance has decided to shelve for now its request to impose a 65 percent rate increase on its Mississippi homeowners insurance customers. The move came a day after the state's insurance commissioner turned down the company's petition for the rate hike, saying he saw no justification for it.

But the company isn't dropping the matter. Company officials will regroup to discuss the concerns expressed by Insurance Commissioner Mike Chaney before returning with a new request to adjust homeowners rates.

"We are going to fully evaluate the filing and continue to work with the commissioner," said company spokeswoman Allison Hatcher.

At stake are the rates paid to Allstate for its coverage of 51,000 homes in Mississippi. The company filed the rate hike request in October because it has experienced a jump in the number of claims stemming from fires, liability, burglaries and water damage. "Costs associated with paying those claims continue to increase," Hatcher said.

Cheney, however, disagreed. He said an actuarial analysis done by the Mississippi Insurance Department determined there was no reason for an increase as high as the 66 percent requested. Despite the outcome on this round, the department will work with Allstate on the matter.

This isn't the only disagreement Chaney has had about a rate increase request recently. In late 2009 he approved a rate increase petition from State Farm, which wanted to raise the rates for homeowners in the coastal counties of Jackson, Hancock and Harrison. However, he approved a 19.5 percent increase instead of the 45 percent requested by the insurance company.

Allstate sells its insurance protects through 14,000 outlets in this country and Canada. The Northbrook, Ill.-based company's operations are divided into four business segments.

In 2009's third quarter, Allstate reported catastrophe losses of $407 million, a drop of 78 percent from the same period in 2008. The reason for the higher $1.82 billion in losses in 2008 stemmed from the damage done by Hurricanes Gustav and Ike that year, making the 2009 hurricane season milder by comparison.

Allstate was one of the top five writers of homeowners insurance in Mississippi in 2008, with 12 percent of the market. The other four companies were State Farm with 26.3 percent, Southern Farm Bureau with 15.5 percent, Nationwide with 9.7 percent and Farmers with 6 percent.

In 2007 the state had the nation's seventh-highest average homeowner's premium. The $1,019 was an increase of 2.1 percent from $998 in 2006.