LexisNexis: US auto insurance rate adjustments slow in 2024 as market softens

By Mia MacGregor

June 13 - (The Insurer) - U.S. auto insurance rate adjustments slowed in 2024, with a year-over-year increase of 10% falling below 15% in 2023, according to a new report from LexisNexis Risk Solutions.

The 2025 LexisNexis U.S. Auto Insurance Trends report noted that these rate increases helped U.S. insurers address profitability issues. Direct written premiums grew 13.6% to $359 billion in 2024, slightly below the 14% growth in 2023.

Incurred loss ratios steadily improved throughout 2024. This combination allowed insurers who returned to profitability to adopt a more surgical and balanced approach to rate changes, with many filing for rate decreases for the first time in years, according to LexisNexis.

The report also highlighted that claims severity continues to evolve, as total loss frequency rose nearly two points to 29% of all collision claims. Bodily injury severity jumped 9.2%, and property damage severity rose 2.5% year-over-year. In contrast, collision severity declined by 2.5% year-over-year.

LexisNexis also noted that policy shopping reached an all-time high, with more than 45% of policies in force shopped at least once by year-end. Consumers aged 66 and older shopped and switched more than any other age group.

DRIVING VIOLATIONS ON THE RISE

All driving violations are on the rise, increasing 17% year-over-year with rates across the U.S. surpassing 2019 levels, according to the report.

Major speeding violations rose 16% year-over-year, which is 38% higher since 2019, and minor speeding violations increased 25% year-over-year, 21% higher since 2019.

Driving under the influence rose by 8% over 2023 levels, with drivers aged 66-90 experiencing the largest jump in DUI violations. The number of drivers with distracted driving violations increased by 50% from 2023 to 2024.

"Insurers who can quickly evaluate shifting trends and adapt pricing models should have a competitive advantage, enabling them to price risk more accurately and quickly, which should also set themselves up for more success as these trends impacting the industry persist,” said Jeff Batiste, senior vice president and general manager, U.S. auto and home insurance, at LexisNexis Risk Solutions.