https://www.chicagobusiness.com/insurance/state-farm-cutting-illinois-auto-rates-second-straight-year
Wonder what this means for everybody? The company struggling?
6 replies (most recent on top)
The recent trend of "abject failure" does not involve "building up reserves." It involves wasting billions of dollars on failed reorganizations, only to turn around and spend billions more to fix previous mistakes, and in the process fail yet again.
It’s because they previously lowered the discount percentages for MLD, which actually increases the premium, so lowering rates pretty much puts the rate unchanged.
It means the cost reduction measures are doing what they’re supposed to do, and the predictive models say they can operate profitably at a lower, more competitive price point. So they can continue the recent trend of “abject failure” by making money and building up reserves. You know, the actual reason for having the company.
If you steadily raise the price of a service over decades and then lower the price one year you can send out flash bulletins telling the world the rates are dropping. No need to mention the price went up 200% and this is only a 3% decrease in price. Next I hear if you pay using your member credit card you’ll get a receipt telling you you saved 75% and receive “State Farm” cash you can apply to your next payment, prediscount of course.
I don't think it means anything, except that some dude in charge of pricing thinks this is a good move. Given the company's track record of abject failure of late, I'd bet that dude is probably wrong.
I am pretty sure it means they are serious about doing what they need to do to retain current and add new clients. What do you think it means snowflake?