Allstate Plans to Leave N.J. Over Regulations : Insurance: The company says it will gradually withdraw from the automobile and homeowner policy business.
Allstate Insurance Co. said Monday that it will make a “gradual and orderly” withdrawal from the automobile and homeowner insurance business in New Jersey, where the company said it has lost $250 million in the last 20 years.
Allstate, which recently cut back on writing new auto policies in California, said it will leave New Jersey because of what it called “excessive” regulation of insurance and legislators’ resistance to reforms. It earlier cited similar reasons for wanting to curtail policy sales in California.
The company insures 425,000 automobiles and 250,000 homes in New Jersey, where it is the largest seller of policies in both categories. A spokeswoman said that Allstate’s withdrawal could take five years.
Gov. James J. Florio, a Democrat who has fought the insurance industry over rates and other matters, said that New Jersey could have kept Allstate from pulling out only by acceding to its request for a 28% rate increase. “That wouldn’t be fair, and we won’t be blackjacked into agreeing,” Florio said. “Our state experts concluded the company already was charging 6% more than it should.”
In announcing Allstate’s departure from New Jersey, Ed Young, the company’s group vice president for auto, told reporters in Princeton: “After years of fighting for meaningful reform and fair regulation, we had to face reality.
“Hundreds of millions in operating losses had accumulated over the past 20 years and we could anticipate persistent, if not accelerated, losses into the future. To continue struggling in New Jersey in the face of such losses would be irresponsible to our shareholders, customers and employees.”