Factbox: Insurers return part of auto premiums as coronavirus cuts driving

(Reuters) – Major U.S. insurers are offering credit to auto and motorcycle policyholders following a decline in driving, as most Americans stay at home under widespread orders to help contain the spread of the novel coronavirus.

Following is a list of companies that have offered to return premiums:


Allstate, one of the largest U.S. auto insurers, said it would return more than $1 billion in premiums to customers. Most customers will receive a “payback” of 15% of their monthly premium for April, May and June, the company said.


The auto insurer said it will return additional money to customers, taking the total to $425 million, through a 10% credit on personal auto policies in force from July to December end, and expanded discounts.

The company had begun the exercise in mid-April, when it said customers will receive $50 per vehicle covered by their policies, the company said.


Aviva Canada said it was offering $100 million in additional immediate relief measures to drivers, including options that would reduce insurance premiums. Customers who have stopped driving entirely could reduce their auto insurance premiums by up to 75%.


The world’s largest listed property and casualty insurance company said it will give personal auto insurance clients in the United States credit on annual renewal premiums, reflecting a 35% cut for the months of April and May.


The insurer said it would provide $200 million in dividends to personal and auto insurance customers in 12 states and the District of Columbia. This is in addition to the $200 million in rate reductions announced previously, bringing the total announced relief to $400 million.


Farmers and 21st Century-branded auto customers will receive a 25% reduction in their April premium. The insurer said it has also implemented flexible payment plans and a temporary pause on cancellations.


Geico Corp, part of billionaire Warren Buffett’s Berkshire Hathaway Inc, said it will offer about $2.5 billion of credits to its 19 million auto and motorcycle policyholders. The insurer said it will offer a 15% credit on policies up for renewal between April 8 and Oct. 7, averaging about $150 per auto policy and $30 per motorcycle policy.


The company said it will return 15% of April and May auto premiums to its eligible personal lines customers. Hanover will also offer flexible bill payment options.


Liberty Mutual Insurance will give personal auto insurance customers a 15% refund on two months of their annual premium, returning about $250 million to Liberty Mutual and Safeco personal auto insurance customers.


The company said it is providing financial relief and preserving coverage in the event of missed payments. Active MetLife auto customers, who have paid to date, will receive a 15% credit for April and May based on their monthly premiums.


Among the largest U.S. auto insurers, Progressive said it would provide about $1 billion to personal auto customers. The company will credit eligible customers 20% of their April and May premiums.


The largest U.S. auto insurer said it would pay $2 billion in dividends to its customers, with premium credit of about 25% for the period between March 20 and May 31.

The company also said it was working to reduce auto insurance rates in every state. The national average for the cuts is 11%, saving customers a total of about $2.2 billion.


The insurer said it was giving U.S. personal auto insurance customers a 15% credit on their April and May premiums through its new stay-at-home auto premium credit program. It said it will continue to provide auto coverage to customers whose jobs include using their personal vehicles to make food, grocery, pharmacy and medical supply deliveries.


USAA, America’s fifth-largest property-casualty insurer, said it will return a total of $800 million to its members.

Source: Company data

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Aditya Soni, Leslie Adler, Stev Orlofsky, Anil D’Silva, Shinjini Ganguli and Shailesh Kuber)

Allstate to return $600 million in auto premiums to customers as pandemic cuts driving

By Suzanne Barlyn

(Reuters) – U.S. insurer Allstate Corp  said on Monday that it would return more than $600 million in auto insurance premiums to customers as many Americans stay home and drive less due to “shelter-in-place” orders to curb the coronavirus outbreak.

Most customers will receive a “payback” of 15% of their monthly premium in April and May, the company said.

A smaller U.S. auto insurer, American Family Insurance in Madison, Wisconsin, also said on Monday that it would return a total of $200 million to auto insurance customers beginning in mid-April. Customers will receive $50 per vehicle covered by their policies, the company said.

“There are very few silver linings out there, but auto insurance companies are definitely one of them,” said Piper Sandler analyst Paul Newsome about coronavirus.

Fewer accidents generally lead to a lower claim frequency and Newsome expects insurance companies with large auto portfolios, such as Progressive Corp <PGR.N>, Travelers Companies Inc <TRV.N> and Allstate, to post good first quarter results.

The payments show how coronavirus could provide a silver lining for at least one industry – auto insurance companies – as more drivers stay off the roads.

Allstate’s payback, which will apply to 18 million policies issued by Allstate and its Esurance and Encompass units, follows a data analysis by the insurer of 23 million cars that showed driving mileage being down between 35% and 50% in most states, Allstate Chief Executive Officer Tom Wilson said during a call with reporters on Monday.

The analysis, based partly on data that Allstate collects from tracking products that some customers agree to use in exchange for discounts, and other sources,

Allstate’s data showed no difference between states that had “shelter in place” orders in effect and those that did not, Wilson said.

Still, some people who are still on the roads are driving faster on what are now less densely traveled roads, which could lead to more serious accidents, Wilson said.

Next Insurance, a commercial insurer in Palo Alto, California that covers small businesses also on Monday said that it would discount April commercial auto premiums by 25% because “stay at home” orders have reduced the insurers’ risks.

(Reporting by Suzanne Barlyn; Additional reporting by Tina Bellon; Editing by Steve Orlofsky and Marguerita Choy)