Toronto, Ontario — Allstate CEO, Tom Wilson, announced that the insurance provider is ready to move away from three major U.S. jurisdictions to preserve assets.
The jurisdictions in question include California, New York and New Jersey, with plans to continue reducing Allstate’s presence in Florida as well.
“If we don’t get price increases this year, or approved this year, in those states, we are going to move from not just not taking on new business to having to say goodbye to some existing customers,” Wilson said.
Automotive rates in California and New Jersey need to rise by about 30 percent, Wilson indicated. Something like 18 percent is required in New York. With post-pandemic issues in frequency and severity still unaddressed on the rate side, the three jurisdictions handed Allstate a combined ratio in automotive at nearly 120 percent in the first nine months of 2023, versus 97.2 percent for the remainder of the country where regulatory paths have proven smoother.
Wilson acknowledges the need for jurisdictions to protect their financial interests but says that profitability for Allstate has lagged too far behind.
“Next year, either we’ll be successful and we’ll get the kind of rate increases we need to get back to the margins we want or we are going to get smaller in those states,” Wilson said. “Either way it should improve auto insurance profitability.”
In regards to Florida, Allstate will also continue to trim its “fast-dwindling exposure,” Wilson vowed.
“We are going to keep getting smaller in Florida until you get an adequate return,” Wilson said. Allstate is currently “a fraction of what we used to be” on that market, now down to less than 3 percent from a one-time 12 percent market share. “And we’ll get smaller.”
