Key Insights for the Road Ahead: Top 5 Auto Insurance Trends of 2023
Auto insurers implemented record-high rate increases in 2023 to address profitability issues, but it appears that these rate hikes were not sufficient.
Insurance companies dramatically reduced their marketing and advertising spend in 2022 and continued this trend in 2023, as there was little point in actively attracting consumers who were already shopping for new policies due to rate increases.
Prior claims history, both at-fault and not-at-fault (where permitted), is highly predictive of future insurance loss, and insurers should explore innovations in sourcing this data from other places to improve their underwriting.
Insurers will need to tune their pricing models and go through a learning curve to properly price EVs due to their fundamental differences from traditional combustion engine vehicles.
Some states were considered healthier and closer to profitability, while states like New Jersey, New York, and California were expected to see continued rate and underwriting activity due to poor performance.
