High gas could cut accident claims
What happened
FactSet says higher fuel costs are already trimming summer miles and that reduced driving could lower auto accident claims — fewer miles means potential loss-cost relief for personal auto portfolios. Insurers may see short-term underwriting tailwinds if the trend holds through peak travel months. (x.com)
Why it matters
FactSet’s June analysis projects a drop in total vehicle-miles-traveled if gasoline prices stay elevated and specifically names Allstate (ALL) and Progressive (PGR) as carriers likely to see benefit-ratio improvement. (insight.factset.com) A peer-reviewed study published in 2019 found that higher fuel prices are associated with fewer road-traffic accidents and that younger drivers reduce driving disproportionally when pump prices rise. (sciencedirect.com 1) (sciencedirect.com 2) Quality Planning (an ISO company) released proprietary findings confirming a strong correlation between miles driven and auto claim costs and noted some carriers have de-emphasized annual mileage as a rating factor. (programbusiness.com) The Insurance Information Institute reported that personal-auto claim frequency fell in 2020 and has remained below pre-pandemic levels even as severity has increased, showing frequency declines can be offset by rising per-claim costs. (iii.org) (iii.org) CCC Intelligent Solutions’ Crash Course Q1 2025 highlights increasing repair complexity from EVs and ADAS and rising casualty-related expenses, indicating lower claim counts may not produce proportional loss-dollar relief. (cccis.com) (cccis.com) Analysts and underwriting teams monitor weekly retail motor-fuel price releases from the Bureau of Transportation Statistics and monthly Vehicle Miles Traveled series from FHWA/FRED to model near-term claim-frequency shifts and update loss-cost projections. (bts.gov) (bts.gov)
Key numbers
- (insight.factset.com) A peer-reviewed study published in 2019 found that higher fuel prices are associated with fewer road-traffic accidents and that younger drivers reduce driving disproportionally when pump prices rise.
- (sciencedirect.com 1) (sciencedirect.com 2) Quality Planning (an ISO company) released proprietary findings confirming a strong correlation between miles driven and auto claim costs and noted some carriers have de-emphasized annual mileage as a rating factor.
- (programbusiness.com) The Insurance Information Institute reported that personal-auto claim frequency fell in 2020 and has remained below pre-pandemic levels even as severity has increased, showing frequency declines can be offset by rising per-claim costs.
- (iii.org) (iii.org) CCC Intelligent Solutions’ Crash Course Q1 2025 highlights increasing repair complexity from EVs and ADAS and rising casualty-related expenses, indicating lower claim counts may not produce proportional loss-dollar relief.
What happens next
- (iii.org) (iii.org) CCC Intelligent Solutions’ Crash Course Q1 2025 highlights increasing repair complexity from EVs and ADAS and rising casualty-related expenses, indicating lower claim counts may not produce proportional loss-dollar relief.
- (bts.gov) (bts.gov) FactSet says higher fuel costs are already trimming summer miles and that reduced driving could lower auto accident claims — fewer miles means potential loss-cost relief for personal auto portfolios.
- Insurers may see short-term underwriting tailwinds if the trend holds through peak travel months.
Quick answers
What happened in High gas could cut accident claims?
FactSet says higher fuel costs are already trimming summer miles and that reduced driving could lower auto accident claims — fewer miles means potential loss-cost relief for personal auto portfolios. Insurers may see short-term underwriting tailwinds if the trend holds through peak travel months. (x.com)
Why does High gas could cut accident claims matter?
FactSet’s June analysis projects a drop in total vehicle-miles-traveled if gasoline prices stay elevated and specifically names Allstate (ALL) and Progressive (PGR) as carriers likely to see benefit-ratio improvement. (insight.factset.com) A peer-reviewed study published in 2019 found that higher fuel prices are associated with fewer road-traffic accidents and that younger drivers reduce driving disproportionally when pump prices rise. (sciencedirect.com 1) (sciencedirect.com 2) Quality Planning (an ISO company) released proprietary findings confirming a strong correlation between miles driven and auto claim costs and noted some carriers have de-emphasized annual mileage as a rating factor. (programbusiness.com) The Insurance Information Institute reported that personal-auto claim frequency fell in 2020 and has remained below pre-pandemic levels even as severity has increased, showing frequency declines can be offset by rising per-claim costs. (iii.org) (iii.org) CCC Intelligent Solutions’ Crash Course Q1 2025 highlights increasing repair complexity from EVs and ADAS and rising casualty-related expenses, indicating lower claim counts may not produce proportional loss-dollar relief. (cccis.com) (cccis.com) Analysts and underwriting teams monitor weekly retail motor-fuel price releases from the Bureau of Transportation Statistics and monthly Vehicle Miles Traveled series from FHWA/FRED to model near-term claim-frequency shifts and update loss-cost projections. (bts.gov) (bts.gov)
