Telematics and usage-based insurance on the rise: J.D. PoweR  August 31st 2023

Telematics and usage-based insurance on the rise: J.D. Power | Digital Insurance

Customer satisfaction with auto insurance dropped 12 points, on a 1,000 point scale, year-over-year, largely driven by dissatisfaction with the cost of premiums, according to J.D. Power's 2023 U.S. Auto Insurance Study.

Satisfaction with the price that customers pay for their auto insurance declined 25 points in the first half of 2023. Auto insurance price increases are higher, at 15.5%, than the other categories reported by the Consumer Price Index, which were an average of 4.9% in the past year.  

J.D. Power reports that customers' unhappiness with price increases is driving more carriers to offer usage-based insurance programs and telematics products, and more consumers to adopt them. Participation rates in UBI programs have more than doubled since 2016, from 8% to 17%. New customers have a UBI participation rate of 26%, according to the study. 

"That's a big number – one in four of the people who are buying a policy today are signing up for UBI," said Mark Garrett, director of insurance intelligence at J.D. Power.

Road Risk Alert: Labor Day Sees Heightened Distracted Driving and Speeding - Cambridge Mobile Telematics

Labor Day weekend marks the unofficial end of summer. Many Americans hit the roads for one last summer trip. In fact, CMT’s data shows that the average trip length increases on Labor Day by 5%, nearly 50 seconds more.

Like July 4th and other holidays with increased travel, Labor Day sees heightened levels of risky behaviors like speeding and distracted driving.

To understand the level of risk US drivers will face on Labor Day this year, we analyzed distracted driving and speeding trends the 30 days before and after Labor Day from 2020 through 2022, spanning 20 million trips.

Labor Day sees a 34% increase in speeding

Annual New Car Ownership Costs Over $12K

AAA reports that the cost of vehicle ownership is up over $1000 a month for the first time. AAA’s Your Driving Costs (YDC) are up sharply this year has been a reliable data source for the expenses associated with owning and operating a brand-new vehicle for more than seven decades.

Based on the latest figures, the average cost of owning and operating a new vehicle in 2023 has increased significantly, with an annual expense of $12,182 or a monthly cost of $1,015. This is a sharp increase from 2022 when the average yearly cost was only $10,728, or $894 monthly.

It’s important for car buyers to clearly understand the costs associated with owning a new vehicle,” said Greg Brannon, AAA’s director of automotive research. “Due to global supply chain issues and constrained inventory of new vehicles, car prices rose dramatically in 2022. And while the situation continues to improve, the spillover effects are keeping prices high.”

Commercial property insurance market to hit US$724bn by 2032 – report

The commercial property insurance industry generated US$254.9 billion in 2022 and is projected to reach US$724 billion by 2032, with a compound annual growth rate (CAGR) of 11.3% from 2023 to 2032, according to a new report from Allied Market Research.

The growth of the commercial property insurance market is driven by factors such as increasing awareness of risk management among businesses, regulatory requirements mandating insurance coverage, and the rise in natural disasters and man-made incidents. Additionally, the expansion of businesses globally contributes to the demand for property insurance.

However, the market faces challenges such as insurance fraud, volatility in property values, and the complexities of underwriting large-scale properties, the report said. Despite these challenges, opportunities exist in the adoption of advanced technologies like artificial intelligence and data analytics for risk assessment, the development of customised insurance products, and the potential for market expansion in emerging economies with relatively low insurance penetration.

Fraudulent auto insurance claims highlight need for in-person inspections | Repairer Driven News

A newly released survey is shedding light on insurance fraud, reporting that 35% of auto policyholders have submitted claims for preexisting damage.

ValuePenguin’s survey of nearly 1,950 consumers found 60% of Millennials have filed insurance reports for preexisting damage to their vehicles; 27% of Generation Xers and 14% of baby boomers have done the same.

Divya Sangameshwar, a ValuePenguin insurance expert, said such fraudulent claims speak to the importance of insurers conducting thorough, in-person vehicle inspections.

“In addition to giving insurers a complete picture of the status of the vehicle, regular in-person inspections can also prevent claims padding, or omissions on insurance applications,” Sangameshwar told Repairer Driven News. “Insurers can also use in-person inspectors to communicate the importance of being truthful on insurance applications, and the consequences for lying — especially to their younger policyholders.”

Repairers have previously spoken of the need for conducting in-person inspections rather than making photo-based estimates. They’ve said that damage detectable by in-person appraisers can be overlooked in photos.