2. Parked Performance
Although the property & casualty insurance industry, of which auto insurance is a sector, increased net profits 16.4% during the first 9 months of 2015, auto insurance profitability for Q was the lowest since 2001.
The record increase in 2015 new vehicle sales provided more opportunities to sell policies, but it also added more vehicles to the roads, which increased the number of accidents. The total number of crashes increased more than 25% from to 2014.
Much cheaper gasoline allows consumers to drive more, and farther. This has contributed to a 9.3% increase in highway deaths for the first 9 months of Incurred losses for auto insurance increased 2% from 2013 to 2014.
State Farm, GEICO, Allstate, Progressive and USAA, the top 5 direct-premium private passenger auto insurance writers, increased their market share from 2013 to 2014; however, Farmers, Nationwide and Travelers lost market share.

3. Signs of Stress
Allstate reported a 41% decrease in net income for Q4 2015, compared to Q , because of an increase in auto claims.
Despite spending billions for advertising, the major auto insurance companies are not swaying consumers to switch, which the average driver hasn’t done for 12 years and 36% never comparison shop for better rates, according to a survey.

4. Pushing Premiums
According to AAA’s 2015 Your Driving Costs study, the annual cost to own and operate a vehicle declined almost 2% to $8,698; however, auto insurance had the largest increase among the study’s sectors, increasing 8.99% to $1,115 per year.
A recent Consumer Federation of America (FCA) study found that consumers with good driving records who lived in apartments were paying an average of $112 more per year for basic liability auto insurance than if they were homeowners.
NerdWallet data revealed that the 5 most expensive US cities for auto insurance were Detroit, New Orleans, Grand Rapids, Newark and Baton Rouge. The 5 least inexpensive were Winston- Salem, Greensboro, Raleigh, Durham and Charlotte, all in North Carolina.

5. Consumers’ Voices
The J.D. Power 2015 US Insurance Shopping StudySM reported that 39% of consumers surveyed shopped for a new auto policy during 2014 because of increased rates; however, only 29% actually switched insurance companies.
Auto insurance companies’ rate of converting quotes to closings decreased 13% during 2015, compared to 18% for Shoppers’ brand awareness of insurance companies also decreased from 62% for 2014 to 60% during 2015.
A July 2015 Towers Watson survey found that 88% of Millennials would or might be interested in user-based insurance, as measured by vehicle-embedded technology, compared to 74% for older auto owners.

6. Driverless Disruption
The speculation about how much autonomous vehicles will affect the auto insurance industry continues to increase. In its June 2015 study, KPMG estimated that accident frequency could decline 80% by 2040, contracting the industry by more than 60%.
The study included a survey of auto insurance executives, revealing that just 29% thought they were very knowledgeable about autonomous vehicles. In addition, 74% of survey participants said their companies were “unprepared for driverless vehicles.”
Their lack of knowledge and unpreparedness correlate with how soon autonomous vehicles will have an “extremely significant impact on their companies”: only 3% said there would be an impact during the next 5 years, but 49% said within 12 years.

7. Advertising Strategies
Autonomous vehicles will also affect local insurance agencies; so they could concentrate on advertising comprehensive insurance bundles. As the premiums for auto insurance decline, they would still retain a maximum number of customers with other insurance.
With the huge number of Baby Boomers and seniors living longer and driving later in life, TV is the perfect medium for agencies to brand themselves as experts in serving older drivers, with discounts and valued-added services.
Local agencies can market the benefits of consumers reviewing their current insurance and updating coverage leading into various seasons: spring, with increased driving for summer vacations; fall, with increased accidents due to winter weather; etc.

8. Social Media Strategies
Encourage all auto insurance customers to submit their stories about how the agency and a specific agent was helpful during a claim, especially when the agency and/or agent went the “extra mile” to serve customers.
Ask customers and the agency’s social media audience to take a pledge not to text while driving and display the list of names as a regular post update. Instagram should be included in this program to reach the large teen and young adult audiences on the site.
Auto insurance agents can use the power and reach of social media to brand themselves as experts, using a series of podcasts and/or videos, demystifying auto insurance, providing tips about making claims, etc. and the latest news from the industry.