Underwriting profitability for personal auto insurance is showing signs of improvement after recent years of record losses, according to the Insurance Information Institute (Triple-I). However, the institute noted that these gains may take some time to impact premium rates.

Triple-I reported that auto insurers’ 2023 net combined ratio of 104.9 is 7.3 points better than 2022. Additionally, 2023 net written premium growth of 14.3% is the highest in more than 15 years and six points higher than The next highest level during that period. , reflecting rate increases to offset inflationary loss costs, according to the “Triple 1 Issues, Trends and Insights Summary: Personal Auto Insurance Rates.”

New car sales in 2023 saw their best performance in four years, which helped the profitability of car insurance companies. However, 2022 was marked by significant underwriting losses. The case brief noted that the number of drivers and miles driven have returned to pre-pandemic levels, but risky driving behaviors that led to significant losses have not improved.

Dale Porfilio (pictured above), chief insurance officer at Triple-I and president of the Insurance Research Council (IRC), highlighted the report’s findings and noted how IT can improve driving behaviour.

“An IRC survey found that 45% of drivers said they made significant safety-related changes in the way they drive after participating in the telematics program,” Porfilio said.

There are several factors that contribute to high car insurance premiums. These factors include higher frequency and severity of accidents, more deaths and injuries resulting in increased lawsuits, supply chain issues, higher labor costs, and more expensive vehicle repairs due to increased technological sophistication in vehicles.

Last month, the institute published a warning about a report showing that although growth in property and casualty (P&C) insurance replacement costs has slowed in the United States, that trend is likely to reverse, with P&C insurance replacement costs expected to grow faster than overall inflation. . By 2026.

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