LexisNexis U.S. Auto Insurance Trends Report Shows COVID-19’s Impact on the Industry Market disruption reflected by shopping volatility, uptick in dangerous driving, policy renewal delays and fewer claims
LexisNexis® Risk Solutions has released its 2021 U.S. Auto Insurance Trends Report, which aggregates annual market data about driving behaviors, auto insurance shopping, underwriting and claims to help insurance carriers better understand the shifting landscape. This year’s report analyzes 2020 data to reveal changes in consumer behavior, carriers’ reaction, and the overall impact of the COVID-19 pandemic on the auto insurance industry. It also provides auto insurance carriers with trended insights to help improve their capabilities and competitiveness across the auto insurance lifecycle.
“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 Adam Pichon, vice president and general manager, auto insurance, LexisNexis Risk Solutions. “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 looks at how consumer behavior and carrier business practices tied to the auto insurance policy lifecycle diverged in 2020 from the patterns we typically see – largely due to the influence of COVID-19.
Auto Insurance Trends Highlights a Rollercoaster Year
- The auto insurance shopping data fluctuations were turbulent throughout 2020. However, year over year, 2020 shopping volumes closed 5.3% higher than 2019 with an annual year-end shop rate of 41%.
- Cyclical policy renewal patterns for many consumers were interrupted by the pandemic with new business policies written down 12.6% in April 2020 and 10.4% year over year. Even so, this unusual activity still prompted an overall net increase for 2020, bringing market retention to 83%.
- Empty roadways gave rise to dangerous driving behavior with a noted increase in high-speed instances first observed in mid-March 2020 and that held at 10% higher than 2019 figures for the remainder of the year.
- New generational data illustrated an increase of Driving Under the Influence (DUI) violations among younger drivers – particularly those in the Generation Z age segment, with an approximate 50% increase in recorded violations in March and April of 2020.
- Collision claims decreased, but severity rose, much like the reduction in total miles driven, the volume of collisions and subsequent claims dropped considerably. Collision severity saw a 3.7% year-over-year increase in 2020.
The trends identified in this year’s report highlight several opportunities for auto insurance carriers to improve their business operations regarding quoting, underwriting, and claims, and prepare for any future disruptions. To download the LexisNexis Auto Insurance Trends Report, click here.