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Old 04-06-2020, 09:25 AM
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Default Some auto insurers are returning premium (mutual or not)

Just saw news that AMFAM (mutual) is going to give some money back to policyholders due to low loss ratio (expected?). That made sense since they are mutual. Then Allstate also announced something similar despite being a stock company. Dividend to policyholders doesn't happen a lot in short tail line like this and I think last dividend I know is from statefarm several years ago. I think more and more auto insurers to follow what AMFAM and Allstate did.
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Old 04-06-2020, 09:52 AM
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Amica and USAA routinely give dividends.
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Old 04-06-2020, 02:05 PM
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Default Policyholder dividends

Policyholder dividends are formula based and in personal auto the formulas are likely filed with the insurance departments. So this is not a surprise.

I stand corrected: This IS a surprise that Allstate is doing this.
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Last edited by jerrytuttle; 04-07-2020 at 10:41 AM.. Reason: I was wrong.
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Old 04-06-2020, 03:13 PM
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Policyholder dividends are formula based and in personal auto the formulas are likely filed with the insurance departments. So this is not a surprise.
I get it isn't a surprise for mutuals. Is it something that is common for public stock based insurance companies?
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Old 04-07-2020, 06:48 PM
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Allstate is also advertising the crap out of it.
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Old 04-07-2020, 08:26 PM
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Warren plz
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Old 04-07-2020, 08:39 PM
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Stock companies doing this makes me believe that the amount they're saving in reduced loss experience is a ton -- significantly more than the premiums they're "returning".
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Old 04-07-2020, 08:46 PM
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Stock companies doing this makes me believe that the amount they're saving in reduced loss experience is a ton -- significantly more than the premiums they're "returning".
Iím with you. Still, if State Farm wants to toss me a handful of Tubmans, that would be great.
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Old 04-08-2020, 09:37 AM
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Geico joined the fray. 15% off renewals and new policies. They estimate it's $2.5B in returned premium.

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Stock companies doing this makes me believe that the amount they're saving in reduced loss experience is a ton -- significantly more than the premiums they're "returning".
Ding ding ding...Most telematics sources suggest driving is down 30-50% depending on jurisdiction. So far the carriers are ponying up about 15% in reductions.
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Old 04-08-2020, 09:59 AM
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I've seen that Allstate is recording the "payback" as an underwriting expense. I'm guessing they're doing it that way so that their premium volume doesn't change when looking at market share.
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