Progressive profits too much, may have to refund Florida auto policyholders
Progressive may have to refund Florida auto policyholders because it has made more profit in the past three years than state law allows, according to a recent Progressive SEC filing.
The filing claims that since Florida’s insurance reform was enacted in early 2023, Progressive has seen lower loss costs on certain types of personal auto accident claims and favorable reserve development.
Progressive says it has lowered its personal auto rates twice in the last year, but despite these actions, the company’s profit for personal auto in Florida for the 2023 to 2025 period may exceed the statutory profit limit.
“We are not currently able to determine whether we will exceed the permitted profit limit because several factors can impact the determination,” the SEC filing says. “The Atlantic hurricane season continues through late November 2025, and the risk of hurricanes impacting Florida through that time is relatively high. In addition, any reserve development through the first quarter 2026 on losses for accident year 2023 through 2025 will impact the statutory calculation.”
Florida Statutes 627.066 and 627.915 require auto insurers to report excessive profit. It also outlines formulas that insurance companies should use to determine their underwriting profits.
Insurance Commissioner Mike Yaworsky announced a decline in auto insurance rates for the state via a press release in late July.
He said the top five auto insurance groups were indicating an average 6.5% rate decrease, down from an average 4.3% increase in 2024 and a 31.7% increase in 2023.
The release also said the state was experiencing a reduction in the personal auto liability loss ratio, down to 53.3%.
“The continued reduction in auto insurance rates is yet another sign that Florida’s reforms are working,” said Gov. Ron DeSantis in the release. “We will protect our reforms from those who seek to undo them and continue to fight for Floridians.”
DeSantis also announced rate reductions in February, with Progressive decreasing its rate by 8.1% at that time.
He also claimed tort reform was the reason for the reduction at that time, citing numerous bills passed in previous years.
A 2023 bill signed by DeSantis banned assignment of benefits for glass repair in the state. The press release says litigation related to auto glass repairs has dramatically declined since the bill passed, dropping from 24,720 lawsuits in Q2 2023 to just 2,613 in the same period in 2024.
Another bill, SB 2D, signed in 2022, eliminated one-way attorney fees related to assignment of benefits, the release says. It says the bill also helped reduce auto glass repair lawsuits in the state.
Louisiana auto rate reductions
Louisiana Department of Insurance Commissioner Timothy J. Temple announced that multiple auto insurance companies are reducing premiums in the state last month.
“As cost drivers in the market go down, losses go down with them, and businesses are incentivized to compete for customers through lower pricing,” Temple said in a release. “While it will take time for this year’s legal reforms to take effect and begin making a difference, it is a positive sign that insurers saw fewer accidents in 2024 and early 2025.”
IMAGE
Photo courtesy of JHVEPhoto/iStock