20th Century Boosts Rates on Car Insurance an Average 11%

Citing rising claims costs, 20th Century Insurance said Friday that it will raise its auto insurance rates an average of 11%, effective May 1.

The company, which is based in Woodland Hills, said it spent more than 90 cents of every premium dollar in paying claims and covering legal costs. Income from investing the premiums generated after-tax income of $31.9 million last year, a 7.9% return, it said.

Choosing low-risk drivers to insure and operating by direct mail without agents, 20th Century is known for its relatively low premiums. It reported profits from insurance operations last year for the first time in four years, realizing $2.7 million--0.6%--on premiums valued at $403.2 million.

“That comes close to requiring us to tap into our conservative long-term investment program, which we rely upon to protect our current policyholders and to fund the company’s future growth,” said Neil H. Ashley, president of the publicly held firm, which is the state’s sixth-largest insurer of private passenger cars.

The increase in rates applies to bodily injury liability and medical-payments coverages, he said. While averaging 11%, individual increases in premiums will vary according to the kind of coverage and such factors as the number of vehicles the customer has insured by the company and where the car is garaged.