September 30, 2005
CONTACT: Chris Goetcheus (617) 973-8767
|State Rating Bureau Recommends|
5.4% Auto Insurance Rate Decrease In 2006
The State Rating Bureau ("SRB"), the statistical arm of the Division of Insurance, today filed its recommendation for a 5.4% statewide average decrease for private passenger auto insurance rates in 2006. If approved by Massachusetts Insurance Commissioner Julie Bowler, the request would reduce average rates by over $58 per vehicle statewide next year.
SRB Director Kevin Beagan said the recommendation is based upon declining loss trends from 2004 data and represents a reasonable decrease to reflect that window of time. "That year's data showed dramatic decreases in bodily and personal injury claims, but we cannot recommend unreasonable downward adjustments based on just one year's data, especially since 2004 was a year with an unusually low number of winter storms," said Beagan.
While the Automobile Insurers Bureau ("AIB") indicated it was requesting a 0.1% statewide average decrease for 2006, the SRB believes the AIB is actually requesting a 2.3% increase above the rate approved by the Commissioner last December. The AIB's proposed 0.1% rate decrease is compared to a number that has been adjusted by the insurers from the statewide average rate approved last December. In effect, the SRB request for a 5.4% decrease is 7.7% less than the AIB recommendation.
The SRB will make its recommendation on the Massachusetts Association of Insurance Agents request for an 18.2% increase in the commission expense pure premium on October 6, 2005.