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3. Insurers Adopt "Sledgehammer Approach" to Rate Revisions, Abandoning Targeted Changes

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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.

 

8. Insurers Struggle to Accurately Price EVs as Loss Results Outpace Expectations

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.
 

7. ADAS: A Double-Edged Sword for Auto Insurers, Reducing Frequency but Increasing Severity

ADAS-equipped vehicles can be more expensive to repair due to costly parts that need replacement, increasing severity.
 

9. UM and UIM Coverages: A Growing Opportunity for Insurers as Minimum Limits

Insurers should be prepared for UIM coverages to be accessed more frequently, as not-at-fault carriers will increasingly see limits exhausted with the at-fault party's carrier, and the claim will come back to them to handle the rest.
 

1. Auto Insurers Grapple with Profitability Woes Amid Soaring Claims Costs

Auto insurers implemented record-high rate increases in 2023 to address profitability issues, but it appears that these rate hikes were not sufficient.
Copyright © 2024 A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.