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

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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.

 

4. Auto Insurance Shopping Reaches All-Time High as Consumers React to Rate Hikes

Unlike in a normal market where shopping increases but new policy purchases don't grow at the same rate, consumers in 2023 were more likely to switch policies when shopping for insurance.
 

10.Beyond Claims History: Innovations in Sourcing Prior Loss Data for Enhanced Underwriting

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.
 

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

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.
 

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.