New data reveals notable shifts in the US auto insurance landscape, marked by a surge in driving violations, evolving consumer shopping habits, and a gradual return to profitability for insurers. The 2025 LexisNexis US Auto Insurance Trends Report, released Thursday, highlights a complex market where both challenges and opportunities are emerging for carriers.
Driving violations across the nation have climbed 17% year-over-year, surpassing 2019 levels. This increase is driven by a 16% rise in major speeding violations and a 25% jump in minor speeding infractions. Distracted driving violations have seen a particularly alarming 50% increase from 2023 to 2024. Even driving under the influence (DUI) incidents rose 8%, with the age group of 66-90 experiencing the largest proportional increase, though drivers aged 26-35 still account for the highest overall DUI volume.
Despite these heightened risks, the report indicates a softening of market conditions. After a 15% rate hike in 2023, auto insurance rate increases eased to 10% year-over-year in 2024. This, coupled with a 13.6% growth in direct written premiums to $359 billion, has led to improving insurer profitability and stabilizing incurred loss ratios. Some carriers are now in a position to pursue growth strategies and even file for rate decreases, according to the report.
This newfound stability arrives as policy shopping reaches an unprecedented high, with over 45% of in-force policies shopped at least once by year-end 2024. Notably, older consumers (aged 66 and above) and long-tenured policyholders (10+ years) are leading this shopping trend, with the latter group showing a 35% year-over-year increase in shopping activity.
“Auto insurers continue to navigate a dynamic market,” said Jeff Batiste, senior vice president and general manager, US auto and home insurance, LexisNexis Risk Solutions. “The combination of the market softening and a return to profitability presents a potential new chapter for the industry as insurers encounter a consumer base that is more willing than ever to shop for deals.”
The report also points to new risks emerging from the transition to electric vehicles (EVs), with drivers moving from internal combustion engine vehicles to EVs experiencing a 14% rise in claim frequency. As the market continues to evolve, insurers face the challenge of adapting pricing models to accurately assess these shifting trends and retain increasingly discerning customers.
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