LexisNexis U.S. Auto Insurance Trends Report Shows Signs of a Revolution in the Auto Insurance Industry
Latest Annual Report Details Trends
This year's report analyzes 2021 data, detailing how the industry continues to navigate the aftermath of pandemic-induced supply shortages, inflation, and new driving behaviors, and provides insights for insurance carriers to help improve their workflows with an eye on streamlining consumer experience. One of the big questions within the
"The jury is still very much out on the long-term effects of these market trends impacting the auto insurance industry," said
Auto Insurance Trends Highlights Yet Another Turbulent Year
- Auto insurance shopping and new policy growth numbers were volatile for the second year in a row, shaped largely by continued pandemic-related influences.
- Changes in driving behavior – including riskier driving behaviors such as distracted driving – created a notable shift in the driving violation data mix reported. An abnormal rise in major speeding violations coincided with another yearly increase in traffic fatalities.
- Claims severity increased even as more normal driving patterns returned, particularly in the second half of the year. While severity of claims have increased, the number of "touches" required to close a claim has not improved with 29% of consumers reporting having to speak with three or more people to get their claim settled.
- Vehicle shortages and supply chain issues led to reduced car sales and slowed the adoption of advanced driver assistance systems (ADAS) after gains in recent years. And with fewer cars available, vehicle purchases were suppressed, which meant auto insurance shopping was down – as vehicle purchases account for as many as one in three auto insurance shopping events.
- Miles driven, which is a strong predictor of loss cost frequency, rebounded to traditional seasonal patterns exhibited in 2019, and carriers could see a significant benefit in more accurate and frequent mileage readings from connected vehicles.
- According to a
December 2021 LexisNexis Risk Solutions survey ofU.S. consumers, 71% are interested in the of use telematics-enabled usage-based insurance (UBI) for purposes of discounts. However, consumer adoption remains much lower, presenting a significant opportunity for both consumers and insurers. - Regulatory environment changes are putting pressure on core rating variables as some states are introducing legislation designed to restrict the types of data used for risk-based insurance scoring. This could be harmful to consumers as 85% of new
U.S. consumer auto insurance policies issued to consumers in 2021 benefited from products that leverage data and analytics.
"When you consider all the variables at play, I do think the assertion by
Considerations for the Road Ahead
2022 could be headed for another year of vehicle and insurance shopping volatility in year-over-year growth rates. Additionally, current economic uncertainty and continued risky driving behaviors suggest claims severity will remain high. Finally,
"The insurance industry is in a critical phase," continued Pichon. "There are so many unknowns, and insurers, no matter the size, who adapt by using data and analytics to enhance their workflows and meet customers where they are will be positioned to make better, more informed decisions and gain market share."
Download the latest Auto Insurance Trends Report.
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LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta,
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