Max Dorfman, Research Writer, Triple-I Louisiana’s personal auto insurance affordability improved to 2.67 percent of median household income in 2022 – down from 2.93 percent in 2020 – but it retains the dubious distinction of being the least affordable state, Triple-I’s chief insurance officer told the Louisiana House Insurance Committee in recent testimony. Dale Porfilio – who also is president of the Insurance Research Council (IRC) – said that by nearly every metric the state’s insurance cost drivers are well above the national average: Accident frequency – Louisiana is 16 percent higher than the national average; Repair cost severity – Louisiana is 9 percent higher; Injury claim relative frequency –…

By Max Dorfman, Research Writer, Triple-I Georgia’s personal auto insurance affordability has significantly worsened over the past decade and a half, making it one of the least affordable states, according to a new report by the Insurance Research Council (IRC) – a division of The Institutes, like Triple-I. The study, Personal Auto Insurance Affordability in Georgia, ranks the state 47th in terms of auto insurance affordability. Only four other states – Louisiana, Florida, Mississippi, and New York – are less affordable. In 2006, Georgia was the 27th most affordable state. Personal auto insurance expenditures in Georgia accounted for two percent of the median household income in 2022 (the latest year…

By Max Dorfman, Research Writer, Triple-I Michigan personal auto insurance affordability improved markedly after enacting substantial auto insurance reform in 2019, according to a new report by the Insurance Research Council (IRC) – like the Triple-I, a division of The Institutes The study, Personal Auto Insurance Affordability in Michigan, found that personal auto insurance expenditures accounted for 1.9 percent of the median household income in Michigan in 2022 (the last year the data is available), a decline of half-a-percent from the pre-reform peak. Michigan’s expenditure share remains higher than the percentage in the overall U.S. and forty-four other states. Other key findings from the report include: Before the reforms, Michigan…

By Lewis Nibbelin, Guest Blogger for Triple-I Home and auto insurance premium rates have been a topic of considerable public discussion as rising replacement costs and other factors – from climate-related losses to fraud and legal system abuse – have driven rates up and, in some states, crimped availability and affordability of coverage. It’s important for policyholders and policymakers to understand the role of economic conditions and trends in setting rates.  Jennifer Kyung, Property and Casualty Chief Underwriting Officer at USAA, opens a window into the complex world of underwriting and economics in a recent episode of Triple-I’s All Eyes on Economics podcast. Kyung told podcast host and Triple-I Chief…

Several metrics that influence auto insurance premium rates are starting to improve, but it will take time for these improvements to be reflected in flattening rates, according to a recent Triple-I Issues Brief. Direct premiums written and underwriting profitability improved dramatically in 2023.  Additionally, 2023 net written premium growth of 14.3 percent is the highest in over 15 years. These are great gains, but it’s important to remember that they come on top of results in 2022 that were the worst in recent years. The number of drivers on the road and miles driven have returned to pre-pandemic levels – but the risky driving behaviors that led to high losses during the…

Strong improvements in personal auto insurance results helped drive the U.S. property and casualty insurance industry to its second-highest net underwriting gain in any quarter since at least 2000, according to an S&P Global Market Intelligence analysis. Just 12 months from its worst-on-record start to a calendar year – with a combined ratio of 102.2 – the industry generated a ratio of approximately 94.0. Combined ratio is a measure of underwriting profitability in which a ratio under 100 indicates a profit and one above 100 represents a loss. While quarterly statutory data is insufficient to calculate combined ratios at the line-of-business level, S&P previously estimated that a direct incurred loss ratio…

By Max Dorfman, Research Writer, Triple-I Nearly 16 percent (15.7) of U.S. drivers in 2022 had auto liability insurance limits that were too low to pay for damages or injuries they caused, according to new research from the Insurance Research Council (IRC), a division of The Institutes.  The IRC report found that the underinsured motorist (UIM) rate increased from 12.6 percent in 2017, to a peak in 2020 at 16 percent, and remained elevated in 2021 and 2022. The 2022 rates, however, varied widely across the country, from 5.6 percent in the District of Columbia to 40.9 percent in Colorado. Other states with high UIM rates in 2022 included Nevada…

By Max Dorfman, Research Writer, Triple-I Auto premiums continue to increase as rising labor and material prices, alongside natural disasters, are forcing insurers to contend with significant losses. As  Triple-I previously found in its January report, Insurance Economics and Underwriting Projections: A Forward View, “commercial auto underwriting losses continue, with a projected 2023 net combined ratio of 110.2, the highest since 2017,” according to Jason B. Kurtz, FCAS, MAAA, a Principal and Consulting Actuary at Milliman. Combined ratio is a standard measure of underwriting profitability, in which a result below 100 represents a profit and one above 100 represents a loss.  Insurers are now having to increase rates in response to…

Even as California moves to address regulatory obstacles to fair, actuarially sound insurance underwriting and pricing, the state’s risk profile continues to evolve in ways that underscore the importance of risk-based insurance pricing and investment in mitigation and resilience. Triple-I’s latest “State of the Risk” Issues Brief discusses this changing risk environment and the impact of Proposition 103 – a three-decades-old measure that has made it hard for insurers to profitably write coverage in the state. In a dynamically evolving risk environment that includes earthquakes, drought, wildfire, landslides, and — in recent years, due to “atmospheric rivers” — damaging floods, Proposition 103 has prevented insurers from using the most current…