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Insurance industry

Insurance Rate Hikes and Industry Shifts: Market Updates and Implications

Strategic Insights

— 2 min read

State Farm Insurance, the largest provider of homeowner's insurance in Texas, has announced a 1.8 percent rate increase for new policies and an average of 1.8 percent increase for policies renewed after March 1. This move follows a trend of moderate increases in claims unrelated to severe weather, according to company spokesman Dean Brand. Meanwhile, Smith & Wesson, the nation's largest gun manufacturer, has announced its parent company is shifting focus away from the firearms business due to municipal lawsuits and rising costs of raw materials. Additionally, Qwest Communications International Inc. has made the move to the New York Stock Exchange, aiming to attract global investors and stabilize its stock price.

Key Takeaways:

  • State Farm Insurance will increase rates by an average of 1.8 percent for new policies and 1.8 percent for renewed policies after March 1, citing moderate increases in claims.
  • Smith & Wesson's parent company is shifting focus away from the firearms business due to municipal lawsuits and rising costs of raw materials.
  • Qwest Communications International Inc. has made the move to the New York Stock Exchange, aiming to attract global investors and stabilize its stock price.
  • Humana Inc. has sold its workers' compensation and Medicare supplemental businesses to focus on its core business and reduce debt.
  • Humana expects to take a $500 million charge in the fourth quarter of 1999 due to the deals.
  • The sale of PCA Property & Casualty Insurance Co. to FolksAmerica Holding Co. of New York is valued at $125 million.
  • United Teachers Associates Insurance Co. of Austin has acquired Humana's individual Medicare supplemental business, serving 42,000 members in 17 states.
  • The cost of raw materials is rising as the nation's economy closes in on a record for the longest expansion ever, causing renewed inflation jitters.

Statistics:

  • State Farm Insurance covers 1.1 million homes in Texas.
  • The price increase for new policies at State Farm Insurance is 1.8 percent.
  • The price increase for renewed policies at State Farm Insurance is 1.8 percent after March 1.
  • Humana expects to take up to a $500 million charge in the fourth quarter of 1999.
  • The value of the sale of PCA Property & Casualty Insurance Co. to FolksAmerica Holding Co. of New York is $125 million.
  • 42,000 members in 17 states are currently served by Humana's individual Medicare supplemental business.

Sources:

  • "State Farm Insurance to raise rates." [Cite]
  • "Smith & Wesson up for sale." [Cite]
  • "Cost of raw materials rising." [Cite]
  • "Qwest trading moves to NYSE." [Cite]
  • "Humana sells off businesses." [Cite]

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