Latest Studies

One in eight drivers on U.S. roads was without auto insurance in 2019, according to a new study by the Insurance Research Council (IRC). At-fault drivers who don’t comply with state insurance requirements raise insurance costs for everyone else, and insured drivers paid more than $13 billion in 2016 (about $78 per insured vehicle) for protection against at-fault drivers who have inadequate coverage for medical costs and property damage they inflict on others. This study examines trends in the percentage of uninsured motorists in each state based on uninsured motorists and bodily injury claim frequencies from 2015 through 2019. This study includes previous estimates beginning in 1999. Full Report

This Swiss Re sigma report indicates that the insurance industry paid out a total of $89 billion for natural and manmade disasters in 2020. Claims for natural disasters accounted for $81 billion of the total, with manmade events accounting for $8 billion. Over the course of the year, 189 natural and 85 manmade disasters were recorded. The latest report again called attention to the costs of secondary peril events, which cost insurers more than $87 billion or 71 percent of the total insured losses from natural catastrophes, primarily from severe convective storms and wildfires in the U.S. and Australia. The report noted that in 2020 the number of manmade disasters fell to one of its lowest levels ever, an effect of coronavirus restrictions. Full report

In February Fitch Ratings hosted a webinar on the environmentally friendly areas of the insurance sector, and the panelists’ comments on insurance companies’ efforts to support the movement toward a more sustainable economy are summarized. The primary areas of focus are the issuing of green bonds and stress testing of climate change. Julie Dow, head of sustainable finance at Fitch Ratings, said that the insurance industry is well positioned to act as an enabler of environmental, social and governance policies that will lead to a low-carbon economy. Dow said the sector’s expertise in assessing long-term risk can serve to redirect finance to provide long-term funding to infrastructure innovations. Insurers have begun demanding more environmental transparency from the companies they invest in and can also develop products that reduce risks that are fundamental to infrastructure projects.  Full report

This report discusses the changes that 2020 brought to the auto industry. At the beginning of 2020 the economy was strong, unemployment rates were low, congestion levels were high in many urban areas and miles driven grew. Auto accident and claim frequency had started to flatten, but average vehicle repair costs continued to rise. However, in mid-March many states began to issue shelter-at-home orders in response to the pandemic. With many workers sheltered at home, miles driven in the U.S. plummeted, and auto accidents and claim counts followed suit. Insurers ramped up their digital capabilities, and repairers as well. The pandemic also sharply accelerated changes in digitization and artificial intelligence (AI). This report explores how the auto industry will continue to evolve, and notes that Crash Course will now be a quarterly publication. Full report

This research brief examines the annual average of 360 fatalities on U.S. highways between 2004 and 2009 that resulted from wrong-way crashes. In this report the number of fatal wrong-way crashes and the number of people killed are quantified based on the Fatality Analysis Reporting System (FARS), and the wrong-way drivers in these crashes are compared with the drivers with whom they collide to determine factors that can increase the likelihood of causing a wrong-way fatal crash. FARS shows that 3,885 deaths resulted from wrong-way driving during the period of 2010 and 52.8 percent of those killed were the wrong-way drivers. The article includes a list of the eight factors investigated in the study and discusses potential wrong way driving countermeasures. The report includes multiple exhibits.  Full report

This publication presents the latest biannual dialogue between Allianz Global Corporate & Specialty (AGCS) experts and leading risk managers, broker partners, insurance professionals and members of the media who focus on climate change and environment social governance (ESG). The following articles are featured in the publication: ESG Risks for Company Boards; Climate Change Compliance Challenges; Scenario Planning for Future Disruptions; Preparing for Civil Unrest; and The Impact of Social Inflation.  Full report

Gross premiums were generally increasing in both the life and nonlife sectors in 2019, until the coronavirus pandemic. This expansion of the insurance business worldwide is attributed to increased demand for some life and nonlife policies, particularly auto insurance. Before the pandemic, insurer profits were strong, and the capital position of the industry was high. According to publicly available data, insurers were able to generate revenues from underwriting even as premium volumes declined in some lines of business, since claims payments also declined. However, investment returns and the profitability fell in the first quarter of 2020 due to losses in the financial markets. Although the markets have since recovered, the overall economy remains riddled with uncertainties. The volume of claims payments that insurers will have make is also unclear, in light of current disputes about business income (interruption) liability in 2020. The report includes multiple exhibits.  Full report

A captive insurance company is a type of risk-management arrangement that can take a variety of forms but essentially works like self-insurance. While self-insurance is typically financially viable only for large, well-capitalized companies, midsize companies seeking to lower their insurance costs and control other aspects of their insurance program may consider the costs and benefits of group captive insurance arrangements. This paper, written by Triple-I non-resident scholar Dr. Patricia Born, Midyette Eminent Scholar of Insurance at Florida State University, discusses the considerations for these companies from a financial cost and benefit perspective. Full report