Historic rate increases pushing record-high volume of shoppers into the marketplace to seek new quotes and switch carriers. Research - 40% of drivers are stressed about affording car insurance  May 23rd 2023

2023 U.S. Insurance Digital Experience Study | J.D. Power

Historic rate increases in the property and casualty (P&C) insurance industry have pushed a record-high1volume of shoppers into the marketplace to seek new quotes and switch carriers.

According to the J.D. Power 2023 U.S. Insurance Digital Experience Study released today, insurers have been doing a good job addressing those shoppers’ needs via the digital channel. When it comes to servicing existing customers on digital, however, overall satisfaction declines this year.

“The industry is seeing historical levels of customer churn right now, which puts a spotlight on the critical role insurer digital channels play in not just attracting new customers, but also onboarding them, and in retaining existing customers,” said Stephen Crewdson, senior director, insurance business intelligence at J.D. Power. “When it comes to shopping, insurers are starting to get the formula right, but they are still lagging far behind the best-in-class offerings in other industries like banking and airlines when it comes to servicing existing customers. That needs to become a focal point if insurers really want to build lifetime customer value.”

New research shows 40% of drivers are stressed about affording car insurance

A new survey has found that 40% of insured drivers are stressed about paying for their policies, underscoring growing tension in the auto insurance sector.

The Policygenius study also found that 43% of drivers are paying more for their car insurance than they were last year. Its poll revealed that among drivers aged 18 to 34, 45% of people considered driving without insurance throughout the past year, and said 17% have actually done it.

“Our survey found that people are changing their behaviors, and sometimes even going so far as to take a major financial risk by driving completely uninsured,” said Andrew Hurst, a Policygenius licensed property and casualty insurance expert. “Car insurance is getting expensive for most people but there are ways you can make your insurance more affordable.

Insurers face challenges in battle against high premiums

Insurers attempting to hold the line on premium increases are staring down a number of industry trends conspiring to undermine that resolve, according to a number of industry execs.

Supply chain woes, worker shortages, already high premiums for electric vehicles and a growing incidence of unsafe driving are all exerting pressure on the industry to raise premiums.

US consumers keep vehicles for a record 12.5 years on average

Americans in the waning days of the COVID pandemic are keeping their combustion-engine vehicles longer, according to a new study.

The average age of U.S. cars and light trucks this year climbed to a record 12.5 years, reflecting the impact of supply constraints on dealer inventories of new vehicles in 2022, as well as reduced consumer demand from higher inflation and interest rates, according to the study by S&P Global Mobility.

Americans in the waning days of the COVID pandemic are keeping their combustion-engine vehicles longer, according to a new study.

Despite six straight years of increases, average vehicle age is expected to drop over the coming year as rising availability and renewed demand push new vehicle sales above 14.5 million in 2023, the S&P research said.

How Will Economic Pressures Affect P&C Industry?

How could the current economic environment affect workers compensation – and the property and casualty insurance industry overall – in 2023?

Earlier this month, insurance veteran Robert Hartwig forecasted answers.

Hartwig, a clinical associate professor of finance and insurance at the University of South Carolina’s Darla Moore School of Business, laid out his predictions at the NCCI Annual Insights Symposium in Orlando.

Despite banking and national budget debacles, financial market volatility and a mild recession likely looming, Hartwig’s prognostication was largely optimistic.

“The P&C insurance industry is strong, stable, sound and secure,” he said.

Economic Overview

At last year’s AIS conference, Hartwig told attendees the U.S. was not and would not enter a recession in 2022. That proved true. At the same time, however, consumer sentiment is still relatively low today.

“It’s near 20-year lows,” Hartwig explained, “although it’s come up a little bit in the past year, in part because inflationary pressures have begun to ease. And it is those inflationary pressures that are making people really feel down about the economy.”

POST-DISASTER CONTRACTOR FRAUD COSTS AMERICANS BILLIONS OF DOLLARS EVERY YEAR

Post-disaster contractor fraud costs hardworking Americans billions of dollars every year.

To address this growing problem, the National Insurance Crime Bureau (NICB) is focusing on educating homeowners on how to avoid becoming a victim of deceptive contractors after a natural disaster as part of its third annual Contractor Fraud Awareness Week.

Unfortunately, these catastrophic events provide an opening for dishonest contractors looking to take advantage of homeowners. In 2021, insurers paid $92 billion in catastrophe losses, with upwards of 10% or $9.2 billion lost to post-disaster fraud. This can add hundreds of dollars to a homeowner's annual premium. NICB's Contractor Fraud Awareness Week runs from May 22 to May 26, 2023, and includes partnerships with thirteen states that have issued official proclamations recognizing the importance of combating post-disaster contractor fraud.

Post-disaster contractor fraud costs hardworking Americans billions of dollars every year.

"Catastrophic events impact millions of Americans every year," said David J. Glawe, President and CEO of NICB. "From hurricanes to floods and everything in between, these events are often scary and life changing. But what makes these events even worse is what happens afterward as homeowners affected by these natural disasters are targeted by dishonest contractors. Often before the flood waters recede or rescue operations are complete, unscrupulous contractors prey upon individuals who are at their most vulnerable. Before hiring anyone, call your insurance company first. If you didn't request it, then you should reject it."

What opportunities ESG presents for insurers

It's no surprise that neither traditional nor digital insurers want to miss out on the opportunity ESG provides.

As the insurance market continues to embrace environmental, social and corporate governance (ESG), both traditional and digital insurers are discovering that while there are many benefits to implementing ESG and related programs into their existing practices, it can also be a double-edged sword.

On the one hand, it is widely understood that companies which prioritize and put ESG at the forefront of their business are often the same companies that promote long-term financial health, reflect a resiliency to risk and deliver value to their investors. In fact, a recent study conducted by PwC found that 85% of companies understand that ESG will have a direct impact on their business. So why are some still dragging their feet when it comes to implementing ESG?

Robert Paxton, Head Of Strategy And Business Development – Global, Charles Taylor Group

Swiss Re decides to leave Net-Zero Insurance Alliance

Reinsurer Swiss Re on Monday became the latest major company to leave a global climate alliance focused on reducing emissions that has faced growing political pressure in the United States.

Swiss Re said in an emailed statement it had decided to leave the Net-Zero Insurance Alliance, without giving a reason for the decision.

The move to leave the NZIA, part of the Glasgow Financial Alliance for Net Zero set up by United Nations climate envoy Mark Carney, follows the exit of members Munich Re at the end of March and Zurich Insurance and Hannover in April.

“Our commitment to our sustainability strategy remains unchanged,” Swiss Re said in an emailed statement.

A spokesperson declined further comment.

While Zurich had said it was leaving to focus on helping customers in the transition to a low-carbon economy, Munich Re said it was leaving because of anti-trust concerns.