Tag Archives: Paul Anderson

COVID-19 pandemic may reroute commercial auto trends for insurers

There is a trickle-down effect of the COVID-19 pandemic that permeates almost all aspects of life. In March, the Federal Motor Carrier Safety Administration issued an emergency declaration to suspend long-haul trucking hours of service regulations that have been in place since the 1930s. The goal of this unprecedented declaration: to allow cargo distribution networks to operate as efficiently as possible during these times of rapidly changing directives from federal and local governments.

While regulations for commercial trucking have been eased, other drivers have either been mandated to stay off the road or have fewer reasons to leave their homes. The net effect of that seesaw is crucial to the safety of truckers in the coming months and subsequently will be of interest to commercial auto insurers. In this article, Milliman’s Paul Anderson and Andrew Groth discuss COVID-19’s potential impact on the commercial auto insurance industry.

How could COVID-19 affect the auto insurance industry?

While the health and welfare of people around the world is the most important concern, the outbreak of the coronavirus will no doubt have far-reaching effects on all aspects of our lives, including our driving behaviors. As a result, auto insurers may likely see short- and long-term effects in their claims experience.

In the short term, the auto insurance industry will likely see a sudden and sharp decline in the volume of reported claims due to social distancing and stay-at-home mandates. Whether or not the effects of social distancing will be felt over a prolonged period will be dependent on how quickly the economy recovers once day-to-day life returns to normal. A sluggish economy could have lasting long-term effects on auto claims frequencies.

In this article, Milliman’s Paul Anderson, Eric Krafcheck, and Katherine Pipkorn discuss what auto insurers may be facing in the weeks and months ahead.