Triple-I Weblog | Auto insurance coverage charges impacted by labor crunch, provide chain disruptions

0
119

In a recent interview with CNBC, Dr. Michel Léonard, Triple I Vice President and Chief Economist, on how returning to pre-pandemic driving levels leads to higher car accident rates.

For insurers, more accidents mean a higher volume of more expensive claims for damages due to higher repair costs, delays in repair time due to lack of chips, interruptions in the supply chain and labor shortages.

The consumer price index showed the auto insurance index rose 16.9 percent year-over-year in May, after rising 6.4 percent in April year-over-year.

Elyse Greenspan, managing director at Wells Fargo, said the year-over-year increase was due to the premium base in May 2020 and reflected pandemic-related refunds. The Triple-I analysis shows that US auto insurers paid back $ 14 billion to their customers due to the sharp drop in kilometers driven last year.

Greenspan describes the current auto insurance market as still weak even after the recent rate hikes. Not all insurers are raising tariffs, she added. “It’s still a good environment for consumers to get auto insurance.”