The market was affected by dangerous driving increases, shopping volatility, fewer claims and policy renewal delays.
LexisNexis Risk Solutions recently released its 2021 US Auto Insurance Trends report, which examined a spectrum of data revealing the directions certain activities are taking in this market.
The report helps insurance carriers to better understand their evolving landscapes.
In the 2021 US Auto Insurance Trends report, there was an analysis of the 2020 data, which provided insight into the impact of the COVID-19 pandemic on this industry. This included measures of change in consumer behavior, carrier response, and the impact in general. It also provided car insurers with insights into other trends that can help the companies to better their capabilities and competitiveness in this market.
“When we look at all of the 2020 auto insurance trends, we can see a pattern that comes from a series of disassociated events,” said LexisNexis Risk Solutions vice president and general manager of auto insurance, Adam Pichon. “While the evolving impact of the pandemic is still unknown, understanding these trends and evaluating their projections can help insurers make better business decisions and more confidently prepare for the future regardless of unexpected market turbulence.”
The report took a close look auto insurance trends in consumer behavior and carrier responses.
Among the key findings in the report included:
- All of 2020 came with sharp data fluctuations in car insurance shopping. That said, year-over-year, its shopping volumes closed 5.3 percent up from 2019, with a 41 percent annual year-end shop rate.
- New business policies written dropped by 12.6 percent in April 2020 and 10.4 percent for the whole of 2020. Cyclical policy renewal patterns were also interrupted by the pandemic. That said, there was still an overall net increase last year, with an 83 percent market retention.
- Fewer cars on the road brought a rise to dangerous driving behaviors. With more open space on the roads, there were already more high-speed instances by mid-March 2020. They stayed 10 percent higher than the 2019 trends for the rest of 2020.
- Driving Under the Influence (DUI) violations rose among younger drivers, particularly among those in Gen Z with an increase of about 50 percent in March and April.
- Collision severity rose, despite fewer overall claims. Severity was up 3.7 percent year-over-year in 2020.
These auto insurance trends are meant to reveal information to help carriers to improve their business operations in quoting, underwriting and claims. It may also be applied in preparation of future disruptive events.
