The Travelers Companies, Inc. TRV has initiated a Stay-at-Home Auto Premium Credit program. Subject to customary approvals, the program plans to reward its personal auto insurance customers by refunding an amount in their accounts. The amount will be equal to 15% of auto premiums payable by members for April and May.
This move comes as a sigh of relief for its clients across the United States as the COVID-19 pandemic has sparked fear across the globe. This crisis has also derailed the entire U.S. economy.
Nevertheless, this new program attempts to recognize the efforts of the company’s clients who have contributed equally to the efforts for preventing the pandemic spread by not stepping out of their homes. This initiative is likely to relieve the company’s members from the financial burden, which resulted from the coronavirus outbreak.
As clients are increasingly using personal automobiles to fetch daily essentials during this period, Travelers is making constant efforts to provide coverage for their automobiles.
Not only for its members, but the company also intends to provide financial assistance to its agents and brokers, as they offer invaluable guidance to its customers. As part of its Distribution Support Plan, the company has speeded up commission payments to its distribution partners. This has provided significant liquidity to the customers during this crisis. By doing so, Travelers is providing a significant cash flow of nearly $100 million to its agents and brokers.
However, shares of this Zacks Rank #3 (Hold) P&C insurer have lost 22.5% in a year compared with the industry’s decline of 11.7%. Nevertheless, we believe that the company’s strong fundamentals are likely to drive its shares, going forward.
Notably, another company in the same space, namely The Allstate Corp. ALL, announced that it will provide a Shelter-in-Place payback worth more than $600 million over the next couple of months (April and May), which will be almost 15% of its customers’ monthly premium.
Also, Geico, which is the auto insurance unit of Berkshire Hathaway Inc. BRK.B, is planning to roll out $2.5 billion in benefits to its auto insurance policyholders. To this end, the company plans to return 15% of premiums to auto and motorcycle insurance customers for renewals over the next six months (from Apr 8 to Oct 7) as well as new policies bought during the period.