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)
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)
