Many changes have taken place since the Great Recession, forever altering the personal auto pricing cycle. My latest Actuarial Review article, which is already attracting positive feedback, takes an in-depth look into what has affected personal auto insurance premiums since 2008.
The article, called, “The New Cycle of Pricing Personal Auto” covers several pertinent factors including:
- The relationship between frequency and employment.
- The curious sudden accident uptick in frequency by miles driven in the 4th quarter of 2014.
- The gradual increase in costs per claim (severity).
- A marked increase in driver distractions not just from cell phones but infotainment systems.
- A growth of driving while under the influence of marijuana and accident increase in states where use is legal.
- Auto manufacturers’ safety features reducing the frequency and severity of accidents.
- Big data and predictive modeling transitioning from a unique pricing strategy to a common insurance business practice.
- Low interest rates.
I am unaware of any other article that comprehensively looks into the auto insurance pricing cycle since the Great Recession. I would also like to thank James Lynch from the Insurance Information Institute for his assistance. I hope you enjoy it!
What do you think has most affected the auto insurance pricing cycle?
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