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Insurer Allstate will likely grant an additional rebate to auto insurance customers due to reduced driving during the coronavirus outbreak, Chief Executive Officer Tom Wilson said in an interview on Tuesday.
A second round of rebates would be tailored to reflect the incidences of reduced driving in specific geographies, Wilson said.
|ALL||THE ALLSTATE CORP.||124.04||-2.51||-1.98%|
Allstate, one of the largest U.S. auto insurers, said on April 6 it would return more than $600 million in premiums to customers as many Americans were driving about 40% to 55% less due to stay-at-home orders aimed at curbing the spread of the coronavirus outbreak.
“I think it’s likely that there will be a next time and when we do it, we will be more precise,” Wilson told Reuters, noting that people are driving more than in mid-April, but still 30% to 40% less than before the pandemic.
Allstate is in the process of distributing the initial $600 million “payback” to most customers of 15% of their monthly premiums in April and May, Wilson said.
There has been an increase in driving in areas where people are no longer bound by stay-at-home orders, but also in places where such orders remain, Wilson said.
Driving patterns are also different in urban areas, where driving might be down by 50% to 60% than before the pandemic, compared to rural areas, which might be down by 20%, Wilson said.
Wilson declined to provide specifics on the possible timing of a second rebate, noting that a tailored approach to the issue would require more analysis than issuing a flat 15% rebate to all customers, he said.
Allstate developed the initial program in about 10 days, but more specificity will take longer, Wilson said.
The insurer based the initial driving frequency analysis partly on data that Allstate collects from tracking products that some customers agree to use in exchange for discounts, as well as other sources.
Geico, part of billionaire Warren Buffett’s Berkshire Hathaway, State Farm, Progressive and USAA are among the U.S. insurers that have also issued rebates to auto insurance customers during the pandemic.