The Hartford Financial Services Group, Inc. HIG provides relief to customers by introducing the COVID-19 Personal Auto Payback Plan. This new plan will provide 15% refund on the April-May personal auto insurance premiums of customers.
Rationale Behind the Plan
The company took this initiative to help fight the coronavirus-induced crisis. It will distribute around $50 million over the next couple of months to all personal auto insurance policyholders, effective Apr 1, 2020. This is expected to reduce the financial burden of customers to some extent. The company is working with state insurance departments to ensure early refunds.
Moreover, it waived late payments and cancellation of coverage for non-payment of dues by all its personal auto and home customers until May 31, 2020.
The auto insurers have been enjoying the market’s sweet spot amid the coronavirus pandemic. The rampant COVID-19 spread forced Americans to stay indoors and work from home. This reduction in travel is kind of a silver lining in the cloud for those who deal in big auto insurance business.
Decline in driving means fewer vehicles on the road, which in turn, lowered the rate of road accidents and decreased claim losses for auto insurers. Some industry players are also returning a portion of their collected auto insurance premiums to their policyholders. Further, companies are offering relief to their customers on non-payment of premium dues by halting their cancellation of coverage due to non-payments, allowing them to defer their premium payments without any penalty, giving them the choice to delay two consecutive premium payments and also permitting them to pay what they can afford.
The Allstate Corp. ALL announced that it will provide a Shelter-in-Place payback worth above $600 million over the next couple of months (April and May), which will be almost 15% of its customers’ monthly premium.
Another company, Geico, is planning to dole out $2.5 billion in benefits to its auto insurance policyholders.
The initiatives taken by this Zacks Rank #3 (Hold) company are in line with its commitment to serve its customers amid a global emergency.
Shares of Hartford Financial have lost 17.5% in a year’s time, narrower than its industry’s decline of 24.1%. The performance looks paler than other companies in the same space, such as Assurant, Inc. AIZ and Kemper Corporation KMPR, which have gained 18.4% and lost 12%, respectively in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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