According to a recent LexisNexis Risk Solutions report, the industry is showing “signs of revolution”.
As 2022 reaches the point that its well underway, new analyses are starting to identify trends suggesting that auto insurance companies could be facing another bumpy ride.
The trends appear to indicate that both shopping volatility and increased claims severity will continue.
The analysis was conducted by LexisNexis Risk Solutions, which released a report indicating that auto insurance companies and the industry as a whole is facing a critical phase. Both heightened claims severity and shopping volatility are expected to continue again throughout this year.
“While we have seen some traditional patterns re-emerge with respect to miles driven and insurance shopping volumes, we saw another rollercoaster year due to volatile activity in claims severity, insurance switching, more serious traffic violations and vehicle purchasing due to macroeconomic conditions,” said LexisNexis Risk Solutions vice president and general manager of auto and home insurance Adam Pichon.
Pichon also went on to say, “Add to that increasing consumer interest in telematics data and an active regulatory and legislative environment, and we are seeing more signs of a revolution in the industry than a rebound.”
Comprehensive data will play a vital role in letting auto insurance companies set more precise rates.
According to Pichon, the use of comprehensive data will be integral to the capacity for insurers to be able to more precisely set prices and rates. This will also make it possible for claims to be handled with improved efficiency in order to provide customers with a better overall experience.
“When you consider all the variables at play, I do think the assertion by LexisNexis Risk Solutions that we are in a revolution of sorts in the insurance industry is apt,” said Celent head of insurance, North America Karlyn Carnahan in a recent news release about the auto insurance companies trend report.
Carnahan continued, saying that “Like no time I can ever recall, insurers are reliant on data and analytics to not only assess risk, but also to provide a more seamless experience for the customer from point of quote all the way through the claims process. Across the insurance continuum, data is oil that keeps the engine running.”