State Farm to cut auto insurance rates for 1 million Louisiana customers

Sep. 5--State Farm, the largest auto insurance company in Louisiana when ranked by market share, expects to cut private auto insurance rates by 2.6% for policy holders in November.

Statewide, the impact of the insurance rate reduction is expected to cost the company $36.6 million across 1 million policy holders.

State Farm has about one-third of Louisiana auto insurance policies and typically adjusts rates annually but has cut rates twice this year for a total of 5.8% so far.

The first rate cut was in February when the company announced its rates were going down by 3.2% which represented a $48 million loss of insurance premiums. State Farm has lowered private auto insurance rate four times in the past two years for a total drop of 10.4%.

In July 2016, State Farm had 1.14 million customers in Louisiana when it raised rates by 8% but its customer base has been declining steadily each year since then. In August 2017, State Farm had only 1.1 million policy holders in Louisiana and raised rates by 13% that year.

Between July 2016 and January 2019, State Farm reported that it had 117,852 fewer customers in the state.

The company collected $525 million in direct premiums in Louisiana in 2018 for private passenger auto physical damage insurance and reported $307 million in direct losses that same year.

The most recent rate cut is about "passing the savings on to our customers" and it has held roughly the same market share for the past decade, according to statement from State Farm.

"Improving expenses and losses were important factors that supported our decision to make this rate change," said Mark Cockerham, vice president of agency for State Farm.

Louisiana has the second-highest auto insurance rates in the country, according to Insure.com. The average premium in Louisiana was $2,298 in 2018, which is more than 50% higher than the national average.

Both Progressive and the Louisiana Farm Bureau Casualty Insurance Co. dropped insurance rates this year by 4.4% and 2.2% respectively. Allstate raised its rates by 3.1% in July.

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