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Industry Shifts Have Significant Impacts

Fall 2022 Issue

By Ellie Walsh, Senior Vice President of Insurance

The insurance industry continues to transform, with shifts in market conditions that significantly impact your agency and insureds.

One key shift is the increase in the percentage of employees who work remotely or have a hybrid schedule. At the height of the pandemic, most employees worked from home. That has changed over time as statistics indicate pandemic concerns have subsided and businesses have brought more of their workforce back to the office. As a result, the number of miles driven by motorists has escalated and insurance claims have mounted. Although studies show that traffic hasn’t reached pre-pandemic levels, less congested roadways have enabled faster speeds and resulted in a higher percentage of serious accidents.

Agencies can respond by seeking current information from insureds. By proactively asking questions, validating and updating information about insureds’ driving habits, you can provide the appropriate coverage and minimize risk.

A second major shift is elevated market pressure. Repair costs have soared due to a shortage of parts and availability of experienced technicians. Increased vehicle complexity also is contributing to skyrocketing costs. Supply chain issues persist, slowing the pipeline of both new and used vehicles, with inventory shortages expected to continue through 2023.

Market pressure prompts the need for agencies to apply rate and underwriting scrutiny throughout the year.

In response to market conditions, 1st Auto is also taking steps to address industry challenges. Some of the actions we have initiated are:

  • Limiting first-party coverage on older vehicles
  • Partnering with agents to ensure we have current and accurate data on vehicles, drivers and insureds
  • Moving to a centralized claims handling system to enhance efficiency and ease of doing business

Stay tuned for more information about how 1st Auto is moving forward and our recommended practices for managing risk and confronting market conditions.