Auto Insurance Outlook: Preparing for the Perfect Storm
When a rare combination of adverse meteorological factors come together, an unpredictable storm is often the result. That might be exactly what the auto insurance industry faces in 2021. Here are some of the stats behind the ominous clouds.
2020 Was a Good Year for Car Thieves.
According to the National Insurance Crime Bureau, 873,080 auto thefts took place in 2020. That’s a 9.2% increase compared to 2019, and it’s the reversal of a two-year trend that saw declining auto thefts.
There are a lot of possible explanations for the surge in car thefts. The pandemic and economic problems may have prompted thefts. People who weren’t driving might not have kept a very good eye on their cars, either, making it easy for thieves to take advantage.
The Surge in Car Thefts Wasn’t the Only Troubling Increase in 2020.
The National Safety Council estimates that there were 42,060 traffic deaths in 2020. This is an increase of 8% compared to 2019. The increase is even worse when you factor in the decrease in traffic. The estimated mileage death rate for 2020 is 1.49 deaths per 100 million vehicle miles. This is 24% increase from 2019, when the estimated mileage death rate was 1.20 per 100 million vehicle miles driven.
Many people have pointed to reckless driving during lockdowns as the primary cause for the increase.
The Auto Insurance Market Continued to Harden.
At the same time, insurance rates have been rising. MarketScout reports that personal automobile lines increased 6.4% in the fourth quarter of 2020. Various factors, including severe weather and natural disasters, and the increasing cost of car repairs, may be contributing to the increases.
Yet Insurers Gave Back Premiums.
In response to stay-at-home orders and the fact that people were driving less, many auto insurers gave consumers refunds or discounts. According to the Insurance Information Institute, insurers returned approximately $14 billion to customers.
And Many Drivers Struggled to Pay Their Bills on Time.
Forty-four percent of the 3,148 insurance consumers surveyed by TransUnion in December said they were concerned about being able to pay their auto insurance bill as they look forward to the three months ahead. “Factors such as rising unemployment and varying financial impacts may be contributing to this trend, and it will be imperative for insurers to be able to identify which customers are facing COVID-19 hardship to strengthen engagement,” reports the Insurance Journal.
Digital Engagement is a Bright Spot.
Fortunately, there are some bright opportunities, including increased digital adoption. The same TransUnion survey found that almost half of respondents filed an auto and/or property claim in the last year, and of those, 39% used a mobile app, website portal or e-mail. In addition, 18% of those surveyed said they prefer to communicate with their insurer through an insurer mobile app or website portal.
Is Your Mobile App Ready?
Provide your policyholders with the information and assistance they need, exactly when they need it! Silvervine Mobile features comprehensive policy information and advanced telematics allowing users to access data, file a claim and complete payments in a snap. And Silvervine Mobile plugs into any policy administration system, regardless of brand.