Two insurance research analysts are warning about dangerous trends shaping up on America’s roadways and asking auto insurance leaders to consider offering one-time rebates to incentivize safer driving practices.
In a research note released this morning, William Wilt, president of Assured Research, and Alan Zimmermann, the research firm’s managing director, explained why they feel compelled to step out of their usual roles as passive researchers to advocate for proactive actions from government regulators, transportation and public health officials, and from the insurance industry to put the brakes on soaring crash volumes they predict around Labor Day.
“What if insurers were to offer one-time rebates to policyholders who avoided claims or moving violations between July 4 and Thanksgiving 2021?”
William Wilt, Assured Research
“Safe driving on crowded roadways is a skill that has probably atrophied for many people,” they wrote, not just relying on their intuition to support observations but expressing a view informed by telematics. Citing research from telematics provider Cambridge Mobile Telematics, they noted that levels of distracted driving rose during the pandemic and that incidences of speeding also remain above pre-pandemic levels.
Separately last Thursday, the U.S. Department of Transportation’s National Highway Traffic Safety Administration released early estimates of crash fatalities revealing that even though Americans drove less during pandemic lockdowns, the agency is projecting the largest number of deaths since 2007 for 2020.
Looking ahead, Wilt and Zimmermann put the telematics data together with the fact that many Americans will begin returning to work in their offices instead of their dining rooms, kitchens and bedrooms in the coming months. In addition, they say that commuting to work contributes disproportionately to the number of car crashes, adding that commuters may be wary of using public transportation.
Together, all those factors (and a few others) are a recipe for increased risks of car crashes—and bodily injury—over the summer and into the early fall this year.
“Many auto insurers earned substantial profits during 2020. What if insurers were to offer one-time rebates (e.g., 2.5-5 percent of premiums) to policyholders who avoided claims or moving violations between July 4 and Thanksgiving 2021?” they ask, proposing an action that this industry can take to save lives and protect profitability going forward.
The researchers suggest the rebates as part of a safety campaign undertaken in partnership with government and transportation authorities, also proposing that public health officials disseminate messages about the safety of public transportation for vaccinated commuters and carpooling as an alternatives to driving.
Last year, many auto insurers returned premiums and lowered rates to reflect the reduced claims frequency during the pandemic, but they subsequently reported that severity of claims partly offset profit gains from fewer accident events.
Last month, Assured Research teamed up with telematics provider Cambridge Mobile Telematics to author an industry study titled “Telematics Will Make the World’s Roads and Drivers Safer (And Insurers More Profitable).” In addition to providing an extensive history of telematics and an update on the profitability of auto insurance programs based on telematics, that report highlighted the potential for insurers to use telematics to incentivize safer driving—encouraging travel at lower speeds, coaxing less texting while driving and even motivating less driving—through outright discounts, gamification techniques or rewards for less risky behavior.