TransUnion, a global information and insights company, recently released a report highlighting the importance of court record data in helping insurers capture driving violation histories for improved risk segmentation and pricing accuracy. The report, part of TransUnion’s Insurance Personal Lines Trends and Perspectives Report, sheds light on the current trends in the auto insurance industry and provides valuable insights for insurers looking to enhance their underwriting processes.
According to the report, auto insurance shopping volume reached a new record high for the second consecutive quarter, with a 7% increase in the number of U.S. consumers shopping for auto insurance compared to the previous year. This surge in shopping activity has been driven by rising insurance premiums, prompting consumers to seek out lower rates. However, there are signs that the market may be stabilizing, as indicated by a slight decrease in the Consumer Price Index for Motor Vehicle Insurance between April and May 2024.
Stothard Deal, vice president of strategic planning for TransUnion’s insurance business, expressed optimism about the industry’s return to profitability, noting that insurers can accelerate this process by leveraging court records in addition to state Motor Vehicle Records (MVR) to assess driving history. The report highlights the impact of the COVID-19 pandemic on traffic violations, with fewer violations issued leading to a decline in surcharge premiums for insurers.
One of the key challenges identified in the report is the lack of efficient sharing of violation information between states, which can hinder insurers from accurately pricing risk. The report also underscores the increasing predictive power of prior violation history in projecting future auto insurance losses, with a growing number of accidents involving drivers with recent traffic violations.
TransUnion’s research has found that court records offer a clearer view of violation activity compared to state MVRs, returning over four times the number of ratable out-of-service violations. This data is not only more comprehensive but also more cost-effective for insurers. By incorporating court record data into their underwriting processes, insurers can improve risk segmentation and pricing accuracy, ultimately leading to greater profitability.
The Insurance Personal Lines Trends and Perspectives Report provides valuable insights for insurers looking to navigate the evolving landscape of the auto insurance industry. By staying informed about industry trends and leveraging innovative solutions, insurers can better serve their customers and drive sustainable growth. For more information on TransUnion and their research, visit their website at http://www.transunion.com/business.