Triple-I: Personal Auto Profitability is Steering in the Right Direction


NEW YORK, June 10, 2024 – Personal auto insurance underwriting profitability appears to finally be headed in a positive direction after recent years of record underwriting losses, according to the Insurance Information Institute (Triple-I).

But while these gains show improvement, it will likely take time for them to be reflected in flattening premium rates, Triple-I noted.

“Auto insurers’ 2023 net combined ratio of 104.9 is 7.3 points better than 2022. Additionally, 2023 net written premium growth of 14.3% is the highest in over 15 years and six points higher than the next-highest during that period, reflecting rate increases to offset inflationary loss costs,” according to the newly published Triple-I Issues Brief, Trends and Insights: Personal Auto Insurance Rates.

In 2023, new auto sales experienced their best performance in four years, which helped improve the bottom line for auto insurers. But it’s important to remember that 2022 was the worst in recent years for underwriting profitability. While the number of drivers on the road and miles driven have returned to pre-pandemic levels, the risky driving behaviors that led to high losses have not improved, the Issues Brief noted.

“We know that telematics can help improve driving behavior,” said Dale Porfilio, FCAS, MAAA, chief insurance officer at Triple-I and president of the Insurance Research Council (IRC). “An IRC survey found 45% of drivers said they made significant safety-related changes in how they drove after participating in a telematics program.”

Research also indicates that policyholders became more comfortable during the pandemic with allowing their driving to be monitored in exchange for the potential of lower insurance costs.

According to Triple-I’s Issues Brief, several factors have contributed to the rise in auto insurance premiums, including:

  • Rising accident frequency and severity
  • More fatalities and injuries, leading to increased lawsuits
  • Supply-chain issues and high labor costs
  • More costly auto repairs due to increased technological sophistication in vehicles

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