A microchip shortage. Logistics industry backlogs. Supply and labor challenges. Worsening driver behavior. Social inflation.
Executive SummaryAs the auto industry continues to grapple with many challenges such as supply and labor shortages, worsening driver behavior and social inflation, among others, experts say claims will likely continue to be impacted and rates will continue to rise as the market hardens. Experts in this article unpack the trends that are contributing to worsening claims severity and frequency, as well as what to expect in the auto insurance industry over the next few years.
These are just a few challenges the auto industry is currently grappling with, meaning claims will likely continue to be impacted and rates will continue to rise as auto insurers confront a hardening market, experts say.
“I would not call this a soft market. It is a soft market in some geographies, but it’s a very hard market in others,” said Tim Zawacki, principal research analyst at S&P Global Market Intelligence. “I think the perception of softness will soon give way to the reality that carriers need to catch up to loss costs, and they’re going to do that through higher rates.”