It also offers a glimpse into a potential future where companies of all sorts, not just auto insurers, charge people different prices based on their behavior-or expected willingness to pay, as projected by algorithms that draw on the seemingly limitless troves of data collected and sold about people every day. In a later email, she added that our reporting on the Maryland filing is “inaccurate and misleading” because it is “based on a rating plan that was never used.”Īllstate’s Maryland filing reveals how an opaque algorithm it has been proposing around the country would have functioned in practice. The Maryland proposal, the statement said, aimed to “minimize customer disruption and provide competitive prices.” “Our rating plans comply with state laws and regulations,” read a short statement emailed by spokesperson Shaundra Turner Jones.

Some have been approved and are actively being used.Īllstate declined to answer any of our detailed questions and did not raise any specific issues with our statistical analysis, which we provided to the company in November, including the code used to calculate our findings. However, the insurer has continued to propose plans with a customer “retention model” in other states. Maryland ultimately rejected the plan, calling it discriminatory, and it never went into effect there. Allstate said the goal of this new customer “retention model,” which it was rolling out across the country, was to limit policy cancellations from sticker shock. Rather than apply the new rates all at once, Allstate asked the Maryland Insurance Administration for permission to run each policy through an advanced algorithm containing dozens of variables that would adjust it in the general direction of the new risk model. Other customers were paying hundreds or thousands of dollars less than they should have been, based on Allstate’s new calculation of the risk that they would file a claim.

One 36-year-old man from Prince George’s County, Md., who Allstate said in public records should have been paying $3,750 every six months, was instead being charged twice that, more than $7,500. The insurer said its new, sophisticated risk analysis showed it was charging nearly all of its 93,000 Maryland customers outdated premiums.

Seven years ago, Allstate Corporation told Maryland regulators it was time to update its auto insurance rates.

Allstate car insurance card template