The driving safety crisis + its impact on auto insurance carriers 

Have you heard about the driving safety crisis? Last week, Arity launched a report detailing how lasting cultural shifts arising from the COVID-19 pandemic have radically increased the prevalence of risky driving behaviors.  

I shared a preview of these insights with a group of auto insurance leaders at an Insurance Innovators USA luncheon a few months ago, and attendees really leaned in to understand the pre- to post-pandemic changes. The shifts observed over the last handful of years profoundly re-shaped our expectations for future driving risk, and the entire industry must quickly adapt to the new normal — or risk falling behind the trends again.  

That’s why, along with the report, we also released an insurer’s guide to navigating these changes. In addition to a rundown of these driving behavior trends, we share how telematics data at scale can help your company proactively identify and anticipate shifts in risk over time to drive profitable growth.  

Here are three quick takeaways:  

#1 The COVID-19 pandemic has altered driving behavior across the U.S.  

Driving behavior looks a lot different today than it did before the pandemic. When the world “shut down” in the spring of 2020, traffic volume plunged, and the wide-open roads created opportunity for risky driving behaviors like speeding and distracted driving. However, even as driving volume quickly rebounded in the summer of 2020, these risky behaviors paradoxically remained elevated.  

The answer to the paradox is that people are not driving at the same times of day, in the same locations, or in the same context as before. With the rise in work-from-home and hybrid workplaces, driving is no longer as concentrated in the traditional commuting times and on the roadways into major cities. With greater workplace flexibility and the proliferation of productivity tools on phones, people are also more often mixing work with other activities — including driving. 

To make it harder for insurers to keep up with the changing driving dynamics, these trends differ state-by-state and county-by-county. In our report, we observe how speeding and distracted driving vary by state, and then we zoom more closely into the state of Texas to see how these trends can vary significantly by county.  

These dynamics point to the need for data that is both recent and granular, while also being credible, for making accurate decisions about driver risk segmentation and insurance pricing.  

#2 Historical claims data can’t keep up with the shifts in driving behavior  

Staying up to date with these trends is becoming a major challenge throughout the industry, and the reality is that those who are relying solely on historical claims data are likely behind. Even the largest insurance carriers face an inescapable choice between data recency (and therefore relevance), granularity, and credibility. The impacts of dynamic behavior shifts can take years to show up credibly in claims data.  

Wouldn’t it be nice to monitor shifts in driving behavior patterns like we monitor shifts in weather patterns?   

With more than 40 million active connections to U.S. drivers, Arity has the scale to deliver authoritative insights into shifts in driving risk.  

#3 Auto insurance carriers need Telematics 3.0 to grow  

As my colleague Devin McLaughlin predicted, carriers have just started to feel comfortable with the “G” word, growth, again. As that pendulum swings, the hard lesson of the last few volatile years is that a new approach is needed to achieve strong, sustainable growth that doesn’t simply start the clock until the next profitability crisis.  

Today, auto insurance carriers need to arm themselves with the right data to better inform their strategies and develop more responsive tactics if they want to achieve long-term profitable growth. That’s where Telematics 3.0 comes in.   

Fueled by the largest driving behavior dataset tied to insurance claims, Telematics 3.0 empowers carriers with the responsive, targeted, and credible insights needed to predict trends and drive smarter decision-making across the entire organization.  

Are you ready to return to growth? Click here to access our guide and learn more about Telematics 3.0.