By Hugh Son and Erik Holm
May 18 (Bloomberg) -- Allstate Corp., the largest publicly traded U.S. auto insurer, and Warren Buffett’s Geico Corp. are re-entering the Massachusetts car market after the state deregulated pricing for the coverage.
Allstate set Nov. 2 as its target date to return after an absence of about two decades, pending approval from regulators, the Northbrook, Illinois-based insurer said today in a statement. Geico started offering online quotes to Massachusetts drivers today, the company said in a separate statement.
Massachusetts was the last state to give up the authority to set rates in a plan designed to increase competition among insurers and reduce prices for customers. The state revoked the 31-year-old controls last year. Progressive Corp., based in Mayfield Village, Ohio, re-entered the market in 2008.
“The recent changes set a new direction, giving insurers greater flexibility,” Allstate said in the statement.
Even before deregulation, auto rates in the state were declining. The average decrease in 2007 was about 12 percent, according to the state. Massachusetts ranks last among the 50 states in seatbelt use according to National Highway Traffic Safety Administration data released last month. Seat belt use is 67 percent in the state, compared with a national average of about 83 percent, the NHTSA said.
Allstate is the second-largest auto insurer in the U.S., behind State Farm Mutual Automobile Insurance Co., according to 2008 data from the National Association of Insurance Commissioners. Geico, owned by Buffett’s Berkshire Hathaway Inc., passed Progressive for the third spot in that ranking.
Policyholder-owned State Farm, based in Bloomington, Illinois, doesn’t actively market new business in Massachusetts. The company, which serves drivers who move there from other states, has no immediate plans to expand in Massachusetts, said Dick Luedke, a spokesman for the insurer.
Allstate left the Massachusetts market about 20 years ago, said Kate Hollcraft, a spokeswoman for the company.Related Links
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