Texas leads the herd on homeowner rate hikes in July

US states use a variety of rate regulation mechanisms, including pre-approval, modified pre-approval, deposit and use, and use and deposit. Some states do not require explicit regulatory approval before insurers use new rates. This analysis is based on when rate filings are “disposed” by state regulators and does not take into account when these new rates went into effect for new and renewal business. In some cases, a new tariff may have been in effect prior to the month the filing was approved by the regulator.

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Texas state regulators approved eight rate hike requests during the month of July that are expected to generate an additional $56.5 million in written premiums across the industry, according to an S&P Global Market Intelligence analysis. It was the largest overall premium increase for any U.S. state from rate hikes approved in July, as carriers continued to raise rates for homeowners across the country.

Farmers reap bounty gains in 19 states

Of all the insurers in this analysis, Farmers Insurance Group of Cos. is expected to see the largest cumulative positive impact on premiums from the 34 rate hikes approved in July in 19 states. These approved increases are expected to increase the group’s written premiums by more than $90 million. About 47% of the expected increase is expected to come from two rate hikes approved in Texas.

Texas Farmers Insurance Co. got what appears to be the biggest single rate increase this month. The 7.5% rate hike in Texas is expected to boost farmers’ premiums by $41.6 million. It will affect approximately 272,000 policyholders.

Liberty Mutual Holding Co. Inc., which received approval for seven rate increases for homeowners in two states, is expected to see the second overall positive impact on premiums from the changes in July at $29.8 million. More than three-quarters of this calculated increase appears to come from an 11% rate hike in Pennsylvania. The rate change took effect July 26 for new business and August 30 for renewals.

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Indiana rate cut stands out

At the other end of the spectrum, a subsidiary of Farmers received regulatory approval for the largest rate cut during the period. The 8.3% rate reduction in Indiana was submitted to adjust the base rate of a previous deposit and usage case that was settled during the month. That filing sought to raise rates by 27.3%, but the regulator said the expected return on equity was too high.

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