July 30, 2006
MAYBE IT’S BECAUSE WE’RE DRIVING FASTER?
American drivers are reporting fewer crashes to their insurance companies than ever before, and nobody knows precisely why.
Fewer claims mean record profits for auto insurers like Allstate Corp. and State Farm Insurance Cos. . . .
But behind the profit boon lies a mystery: Insurers can’t explain the drop in auto claims. And while theories abound, the lack of a clear, identifiable reason is unsettling in an industry that relies on sophisticated statistical modeling to predict its claim payouts. Those predictions are used to set premium rates, to decide whom to insure and to provide earnings guidance to Wall Street.
Or maybe people yapping on cellphones are worse drivers, but that’s offset by a reduced frequency of road rage because they’re too oblivious to get mad. . . .