NAIC’s Auto Insurance Working Group to Discuss the Report Saturday
BOSTON— The following statement from David Snyder, vice president, policy, research and international for the Property Casualty Insurers Association of America (PCI) is in response to the Missouri Department of Insurance, Financial Institutions & Professional Registration’s (DIFP) recently released report, “Private Passenger Automobile Insurance: A Review of the Market in Missouri,” which will be discussed during Saturday’s Auto Insurance Working Group meeting at the NAIC’s Summer National Meeting in Boston.
“As the NAIC examines issues associated with auto insurance affordability, Missouri’s report highlights that auto insurance pricing is fair, objective and refutes the allegations of unfair discrimination and unfair pricing leveled against regulators and the industry by critics such as the Center for Economic Justice, Consumer Federation of America and ProPublica.
“The Missouri report stated that in the nearly 30 years the Department has monitored prices, no evidence has been found that areas with high minority concentration are systematically overcharged relative to risk compared to areas with low minority concentration.”
“As with all other federal and state governmental reports and studies on auto insurance, this report concludes that auto insurance pricing is reflective of the claims and other costs paid for by auto insurance.
“The report demonstrates that claims and related prices vary significantly based on underlying factors such as traffic congestion or density. The factors insurers use help predict the likelihood of someone having an accident or filing a claim. This is the fairest way to price insurance because it reflects the level of risk for an individual driver.
“PCI shares regulators’ interest in making auto insurance as affordable as possible – consistent with the principles of risk-based pricing. The best way to achieve affordability is to address the underlying cost drivers while encouraging and supporting competition and innovation.”