The list of top news stories for 2022 leaves little doubt about what our readers cared most about in the last 12 months. Auto insurance is a focus of 8 of the 10 most-viewed news stories published by Carrier Management for the year.

  1. State Farm Still Wins: Buffett Talks Auto Insurance at Annual Event
  2. All The Latest Insurance Company Estimates: Hurricane Ian Losses (as of 10/20)
  3. Tesla Insurance Turning ‘Nightmare’ Claims Experience Into ‘Dream’: Musk
  4. Berkshire’s GEICO Posts 2021 Profit But Much Lower Than 2020
  5. Progressive Loses A Bundle: Nearly $2.0B Gross Ian Losses; $760M Net
  6. Lemonade Execs Expect ‘Peak Losses’ in 2022
  7. Why You May See Less of Progressive’s Flo In Your State
  8. Breaking Down Inflation’s $30B Impact on Insurers Line By Line
  9. Big Dog Still Off the Porch: State Farm Beats GEICO In J.D. Power Rankings
  10. Are MGAs Winning the Insurance Talent War?

The impact of inflation and rising claims costs on auto insurers, along with their reactions to push prices up higher were hot topics in articles including, “Why You May See Less of Progressive’s Flo In Your State” and “Breaking Down Inflation’s $30B Impact on Insurers Line By Line.”

More recently, the article “State Farm Will Start Hiking Auto Rates, Allstate CEO Predicts,” started climbing up the leaderboard of top stories, contributing to a group of 90-plus articles we published this year mentioning auto insurance and inflation.

Even though I have written many of these articles myself, a recent hike in my auto insurance premiums was a tough pill to swallow. Intellectually, this former actuary totally understands what insurers are up against—and I expected the price of my auto policy to rise along with the price of everything else.

For a while, however, it didn’t.

In fact, my six-month renewal premiums in May and November were the same as they were in 2021.

Then, a month after I paid my premium for the second-half of the year, and a day before the renewal was effective, an impatient truck driver slammed the back of his 18-wheeler into the front end of my 20-year old car. The verdict from the claims adjuster—a total loss.

I didn’t want to buy a new car. For years, fear of keyless entry and all matter of new technology had me praying that my reliable sedan would outlive me.

Realizing the technology wouldn’t get any easier for to master as I grow older, I gave in. And I paid extra for features like blind spot detection monitors with lane change assistance, and rear cross-traffic alerts. Take that future truck drivers headed in my path!

That extra money spent on safety features will surely factor into my insurance company’s assessment of the proper premium to charge me, I thought.

I’ve already spoiled the ending. My premium skyrocketed.

It makes some sense economically, right? New car, new tech, costs more to repair, therefore higher premiums.

At about the same time as I got hit with that whopping insurance bill on top of sticker shock for the car, I tuned into an insurance industry conference to hear an industry representative confirm that logic. “It’s pretty hard to get out of any car accident for less than $10,000,” said Mark James, executive vice president, chief risk and reinsurance officer for CNA Insurance, during the Fitch Ratings 2022 North American Insurance Conference. “They’re basically rolling computers…or rolling showcases for wiring, sensors, cameras, chips…. You get into a small accident and all that has to be either replaced or recalibrated. It’s expensive,” he said, going on to add on commentary about liability losses that “come with attorneys attached to them.”

An analysis countering that logic is presented in the January article: Why ADAS Drives Claims Severity Higher (It May Not Be What You Think)

I hear and understand the intellectual arguments as a former actuary and a journalist.

But as a consumer, I wanted my allegiance to my insurer to be rewarded with visible discounts itemized on my bill in recognition of the efforts I’m making to prevent future claims.

On a personal level, I think we can all understand why the insurance industry often gets a bad rap. The story of one policyholder forced to give up her car, then hit with two unexpected bills to pay before Christmas is one of many. And while the claims process wasn’t the nightmare that Elon Musk described in our third-most read news article, there were some serious missteps on the carrier side. (The fact that I had to call my insurer to remind them to cut a check for the totaled car certainly did not make me feel like a valued customer.)

Clearly it’s been a bad year for auto insurers and for their customers.

In the near term, personal auto carriers will still need to deal with rising claim costs as they continue jockeying for position as they compete with one another and the top dog—State Farm Still Wins: Buffett Talks Auto Insurance at Annual Event (Article No. 1). When profits begin to return, finding ways to incorporate the benefits of safety innovations into insurance pricing is an idea to consider seriously.

Check out the rest of CM Dec. 23, 2022 newsletter to reread some of the top news articles about auto insurance, or click on the titles listed above.

Topics Carriers Auto Claims