Takeaways:
- Increases called necessary to hold expenses to 69.4 cents per dollar of premium
- Filing based on maintaining 8% operating profit
- Rate increase projected to net $58 million from 300,000 policyholders
After reporting increased revenues in November, Allstate filed for a property insurance rate increase in Illinois on December 11 and 12, stating to regulators that it needed to recover financial shortfalls.
Allstate Corp., the parent company of three Illinois-based divisions that filed with the Illinois Department of Insurance for rate increases to take effect in 2026,
Allstate Vehicle and Allstate Vehicle and Property Insurance Co. filed for an 8.8% rate increase,
Allstate Indemnity Company filed for a 6.5% rate increase, and Allstate Property and Casualty Insurance Co. (APC) filed for a 0.9% rate increase. These percentages match the shortfalls each Allstate division states in the filing.
APC catastrophe models and risk sharing provisions amount to 3.5 cents per dollar of premium, but when all weather related losses are added, amount to 60 cents per dollar of premium, according to a Gemini AI-assisted analysis of the filing. The filing comprises 12 separate documents, including four filing memos of 139, 86, 88 and 88 pages respectively.
Allstate's filing states a 69.4% expected losses and loss expense ratio across the three divisions, which means it spends 69.4 cents per dollar of premiums to pay claims and cover costs. The shortfalls cited in the filing justify the rate increases as necessary to maintain its previous 8% operating profit, according to the analysis.
Allstate's justifications for the rate increases in the filing are based on the Verisk Touchstone Model for hurricane risk, as well as a breakdown of its costs per $1,000 of insurance. These costs are 8.8 cents for reinsurance, 2.6 cents for retained risk capital, and 1.1 cents for modeled hurricane losses. Allstate's filing also uses stochastic modeling and includes net cost of reinsurance figures, which is different than the projected catastrophe losses basis used in
More broadly, Allstate's filings point to increasingly severe weather events and claims, along with higher operating expenses based on the Consumer Price Index and Employment Cost Index economic figures, as reasons for the rate increase.
The Illinois Public Interest Research Group (PIRG),
Abe Scarr, director of Illinois PIRG, called for another effort to pass
"It won't be a happy new year for the almost 300,000 Allstate customers who will experience yet another homeowners insurance rate hike early in 2026," Scarr stated in the press release. "Enacting basic consumer protections that residents of every other state enjoy should be at the top of the Illinois General Assembly's list of new year's resolutions."
