The Hartford Financial Services Group, Inc. HIG extends its COVID-19 Personal Auto Payback Plan through June. Introduced in April, the company had earlier announced that the plan will provide 15% refund on the April-May personal auto insurance premiums of customers. The extension of the program will make the company distribute around $80 million to its customers.
Rationale Behind the Plan Expansion
Although many parts of the country are resuming following relaxation of lockdown, very few people are taking risk to venture outside. Hence, traffic is still scanty on the road. Notably, Hartford Financial’s customers will gain traction from this decrease in miles driven and accidents with the help of this deal. The same is also expected to reduce the financial burden of customers to some extent.
The company will continue to work with state insurance departments to enable easy and fast access to these additional credits. It intends to issue the credit to all personal auto insurance customers with policies in force as of Jun 1, 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 plying on the road, which in turn, lowered the rate of road accidents and declined 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 minimally afford.
Importantly, The Allstate Corp. ALL also 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.
The aforementioned initiatives taken by the currently Zacks Rank #3 (Hold) Hartford Financial are in line with its commitment to serve its customers amid a prevalent global emergency.
Shares of the company have lost 33.2% in a year’s time, wider than its industry’s decline of 20.6%.
The performance also looks pale in comparison to other companies in the same space, such as Assurant, Inc. AIZ, The Allstate Corp. and Kemper Corporation KMPR, which have lost 8.3%, 9.4% and 18%, 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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