Updated: Aug 10
Rates continue to climb in Texas for auto and home insurance products. In recent weeks some programs have exited and others are not offering collision and comprehensive coverage. Further, the reinsurance sector was rocked by the discovery of fraudulent letters of credit from Vestoo causing concern for many Texas MGAs with an investor secured for the time being.
There are different issues based on the programs: loss ratio for those who felt they were ahead of inflation and unaware of coming bodily injury concerns, and capacity for others due to the rise in average rates per insured. Homeowners and auto carriers experienced 'death by a thousand cuts' when it came to hail losses this spring. In addition, the rising cost of reinsurance coverage for catastrophes is impacting programs.
This week Allstate informed their agents commissions will be paid on premium net reinsurance expense, which may become an industry norm in order to absorb the costs.
It is a unique moment in time for P&C insurance.
Here are some of the latest changes in Texas estimated from ITC and SERFF:
Progressive's win rate continues to drop with higher down payments
Kemper exits preferred auto and home market
Rate Changes in SERFF
Rate Changes Imputed in ITC Data
Infinity +30% on liability only; +7% on full covg (reported last month as +14% overall from SERFF data)
As insurance rates climb so has the cost of everything else. Your clients will be sending their kids back to school in the coming weeks and paying more to do so. A 2% increase over last year. Promotions and marketing centered around back to school could be beneficial to the growth of your agency throughout August. (Pew Research / Graph from Chartr.co)
Thanks for your use and support of Alinsco - 20 years Strong!