Premiums will have to climb further for insurers to recoup some of the expenses lost to inflation, Allstate Corp. Chief Executive Officer Tom Wilson said.
“We have to raise our prices,” Wilson said Monday in a Bloomberg Television interview. Premiums have already increased 6.5% in the past six months, “and we think we’ll have to go higher from there.”
Inflation will be affecting the U.S. economy for awhile, Wilson said. The consumer price index increased 8.5% in March, its most aggressive pace since 1981, according to the Labor Department. Wilson said that’s contributed to a 40% surge in used-car prices, and repair costs are jumping as well. All of Allstate’s competitors are dealing with the same issue, he added.
Allstate last week reported first-quarter earnings that missed analysts’ estimates, saying that inflation, more frequent automobile accidents, costlier litigation and used-car prices weighed on results.