How Insurers Can Price High-Risk Drivers Accurately During the Pandemic

Last week we shared statistics around the spike in risky driving behavior during the pandemic. On a miles-driven basis, fatalities are up despite traffic volume being down.

States like Minnesota and Louisiana recorded more traffic fatalities during this COVID-19 period than the same timeframe of years past. Even in states like Missouri, fatalities are increasing even with total crash deaths declining, all thanks to speeding.

Insurers need to be aware of this concerning roadway trend, especially during this time of economic uncertainty. An increase in price shopping is common trend during an economic downturn, especially in the insurance space.

As consumer price shopping begins to increase and we see more data surrounding increased fatalities and speeding despite decreased drivers on the road, it’s more important than ever for insurers to have clear visibility into their riskiest driver population, as well as identify high-risk applicants. After all, their underwriting profitability and accuracy is positively impacted when high-risk drivers are easier to spot.

Think about that price shopper being one of the 2,500 drivers that the California Highway Patrol has ticketed for choosing to drive +100 MPH. Would your underwriting department be able to easily identify this high-risk behavior with the current tools they have in place? The ability to do so is critical as those who are speeding are far more likely to be high-risk drivers outside of the COVID-19 pandemic. As a result, their policy pricing needs to accurately reflect those high-risk behaviors taking place.

Now is the time for carriers to begin proactively adjusting strategies to ensure continued profitability during this global pandemic. While there will be a spike in quotes due to price shopping, it’s more important than ever to utilize the right technology to allow you to separate high-risk drivers from those with clean records in order to deliver accurate pricing and assess risk with more precision.

If you’re interested in learning more about how the right technology makes it easy to spot high-risk drivers without pulling an MVR, download our white paper.