LexisNexis’ Risk Solutions US Auto Insurance Trends Report reveals that crash claim frequency remained relatively flat during 2024. Claims severity declined 2.5 per cent year over year, but total loss claims frequency continued to climb, rising nearly two points to 29 per cent of all collision claims.
According to LexisNexis, claim cycle times improved due to elevated attorney representation rates. The report shows that claimants retained counsel for a variety of reasons, including recommendations from family members and friends, and because an attorney contacted them during the process.
Driven by premium increases, policy shopping hit record levels for the second year in a row. By the end of 2024, more than 45 per cent of consumers had shopped for new motor insurance policies, led by long-tenured policy holders and consumers aged 66. Retention rates declined significantly, leading to a rise in policy churn.
LexisNexis said rate increases are beginning to ease, rising 10 per cent year-on-year in 2024 compared to a 15 per cent hike in 2023 as market conditions soften. Nevertheless, insurer profitability is improving, with direct written premium growing 13.6 per cent and incurred loss ratios stabilising, enabling some carriers to pursue growth strategies and file for rate decreases.
As more people returned to the office last year, the number of miles driven returned to pre-pandemic numbers. Risky driving increased, with violations rising 17 per cent year over year, surpassing 2019 levels. Major and minor speeding, distracted driving, driving under the influence and overall violations all rose during the year.
The report also found that EV transitions are introducing new risks, as drivers moving from internal combustion engine vehicles to EVs experienced a 14 per cent rise in claim frequency.
In 2024, 1.57 million EVs were sold in the US, an 8.9 per cent increase over 2023. The total number of EVs insured grew by 40 per cent to 5.6 million in 2024, much higher than the 1.8 per cent growth in the total number of private passenger cars insured in the same period.
