Esurance introduces new rate hike for Illinois market
Esurance, a leading online auto insurance provider owned by Allstate, is looking to raise the rates of its coverage in Illinois. The auto insurance company has plans to raise rates by an average of 5% throughout the state by December 11.Esurance suggests that the increase comes after a review of the Illinois insurance market. The company has determined that a rate increase is necessary in order to remain competitive and account for some of the risks that are emerging within the market itself.
Allstate works to make subsidiary more profitable
In May 2011, Allstate acquired Esurance. After the acquisition was finalized, Allstate suggested that the rates that Esurance offers on auto insurance policies were likely to change. Though much of Esurance remains unchanged in terms of operations, the company is beginning to push for new rates for coverage while still being competitive with other companies in the market. Esurance has a history of losing out on money due to its underwriting process, a problem that Allstate is eager to fix.
Company raised rates in November too
Esurance raised rates on auto insurance coverage in Illinois only last month, on November 17. That rate increase accounted for an average jump of 4.1% state-wide. Some drivers saw rates jump higher than t hat average due to a number of factors. The rate increase that Esurance is pushing for now will follow the same trend. Some drivers, especially those with poor driving records, will likely see rates increase by more than the 5% average that Esurance is seeking.
Rate hikes may help company overcome financial hurdles
According to the U.S. Securities and Exchange Commission, Esurance lost some $146 million during the first nine months of 2012. In contrast, parent company Allstate earned $1.5 billion in the same time period. Allstate is keen to rein in on the apparent financial troubles of Esurance and stop the company from hemorrhaging money. The latest round of rate increases coming from Esurance may help in that endeavor.
