The auto industry is experiencing significant loss costs. Industry combined ratios have been over 102 percent each year since 2011, and frequency and severity are up across all personal coverage types, except comprehensive. While the entire industry will no doubt be forced to respond, we wanted you to understand some of the factors that may affect premiums moving forward. 


People are buying more cars. In 2015, Americans bought a record 17.5 million new vehicles.2

People are driving more. Thanks to lower fuel prices and higher employment, 2015 saw the highest increase in driving in 25 years. 3 

Distracted driving is increasing. According to the National Highway Traffic Safety Administration, fewer people are talking while driving, but more are texting and surfing the web.4

Injury costs are rising. Driven by medical inflation and increasing claim complexity, costs are up 5-6 percent. 4

Repair costs are rising. Newer car repairs include costly electronics –like cameras, sensors and other safety devices. 5

Traffic fatalities are reaching record levels. 2015 brought the largest single-year increase in driving related deaths since 1966. Worse yet, we’re on track for a two-year increase of 18%. 6


2 Strategy & PricewaterhouseCoopers, 2016 Auto Industry Trends; 3 U.S. Department of Transportation’s Federal Highway Administration; 4 National Highway Traffic Safety Administration; 5 ISO Industry Loss Trends; 6 National Safety Council, Insurance Information Institute 


Contact us to conduct a coverage review to make sure you have the appropriate coverage’s and that you are taking advantage of all available discounts.