Rising Auto insurance rates are gaining attention with economists. Most recent BLS data below - Auto insurance is up 22% over the previous 12 months versus overall inflation rate of 3.5%. Since Jan 2020, auto insurance is up 46% against overall CPI of 22%. There are many reasons contributing to the rise in auto insurance rates, and those of us in the industry understand the causes and have risen to the challenges of the market cycle - but increased attention from economists will only increase regulatory pressure as consumers voice frustration. Our partners are leaning into messaging and having open and honest discussions with distribution partners and regulators. The recent CPI report and Economist attention is just another reason for CEOs to stay focused on key metrics in short and long term - and position your company for future market cycles.
It’s a symptom of a similar shaped used vehicle price index. No surprise, except for insurance companies using outdated and inaccurate value at risk predictions in their pricing models.
Senior Director - Insurance Business Intelligence
3moYes, economists are certainly paying attention but so are the media. As the media continue to (appropriately) put focus on this phenomenon, that will feed even more into consumer awareness and frustration.