Auto Insurers in Fierce Battle in 2008, Says WSJ Article - BodyShop Business

Auto Insurers in Fierce Battle in 2008, Says WSJ Article

A recent article published in the Wall Street Journal shone a spotlight on how tough 2008 is shaping up to be for auto insurers, which could mean an even tighter squeeze on body shops and support for the sentiment that things will get worse before they get better.

The article stated that insurance prices are being driven down by tough competition even as accident costs are edging up after years of steady declines. The price to compete is skyrocketing, too, with top insurers paying around $500 million annually to keep their names in front of potential customers.

The article focused primarily on Allstate, saying it was in an intense fight for U.S. drivers with State Farm, Progressive and GEICO. Robert U’Ren, senior vice president of auto-insurance research firm Quality Planning Corp., was quoted as saying that he thought there was still room for auto-insurance prices to go down a little more through 2008. Allstate’s investor relations chief also commented that he expected auto-insurance rates to begin to bottom out this year as competitors that had been cutting rates begin to put through some increases.

According to the article, however, not all insurers agree that raising prices will be the key to winning the battle for drivers. One of Allstate’s other strategies is the Your Choice Auto program, started in late 2005, which is getting around 100,000 new sign-ups a month. Your Choice offers a choice of insurance perks, but the extras carry a fee above the cost of the basic insurance policy. The article cited Allstate President and Chief Executive Thomas J. Wilson saying the product strikes a chord with customers who want to feel they are getting something tangible in return for their premium checks.

But the article speculated that as bad as the economy is this year, especially looking at record gas prices, the strongest lure for drivers may be lower insurance premiums. Also, claims may run higher when drivers look to their insurers to pay for minor accidents they might have paid for themselves in better times.

The article cited how Allstate has taken a couple of punches lately, in California where regulators ordered it to cut its average auto premium by 15.9 percent starting in April, which according to the article will cost Allstate an estimated $245 million. Then of course there’s the situation in Florida, where an appeals court ruled that Florida insurance regulators have the authority to suspend Allstate’s companies from writing new insurance policies in the state because the insurer hasn’t complied with subpoenas asking it to supply pricing information. Allstate said it believed the court’s ruling wasn’t final, so it will continue to write new business.

You May Also Like

Cruise Postpones Release of Driverless Taxi Service

Cruise, a GM subsidiary, recently announced that it will miss its goal of launching a large-scale self-driving taxi service in 2019.

Cruise, a GM subsidiary, recently announced that it will miss its goal of launching a large-scale self-driving taxi service in 2019. Cruise CEO Dan Ammann said the company plans to dramatically increase the number of its autonomous test vehicles on the road in San Francisco, but will not be offering rides to regular people this year, according to an article from The Verge.

Cutting Edge Automotive Solutions Partners with Andretti Rallycross

Andretti Rallycross announced that Cutting Edge Automotive Solutions will serve as technical partner on Cabot Bigham’s No. 02 OINK Clothing Beetle for the remainder of the 2019 Americas Rallycross season, showcasing their SP Tools USA brand.

Ford, Volkswagen Expand Collaboration to Include Autonomous, Electric Vehicles

Ford Motor Company and Volkswagen AG announced they are expanding their global alliance to include electric vehicles – and will collaborate with Argo AI to introduce autonomous vehicle technology in the U.S. and Europe.

CCAR Updates Website with More OSHA Alliance Resources

CCAR (Coordinating Committee For Automotive Repair) has announced the addition of new Occupational Safety and Health Administration (OSHA) Alliance content on its main website, www.ccar-greenlink.org.

CARSTAR McLaren Lake Forest and CARSTAR McLaren Irvine Open in California

Owned by husband-and-wife team James and Mary Davis, CARSTAR McLaren Lake Forest and CARSTAR McLaren Irvine are a family business.

Other Posts

CIECA to Offer Webinar on What Businesses Need to Know to Implement CIECA Standards

CIECA will hold its next CIECAst webinar, “Implementing CIECA Standards: Implementation Guide and Appendix C – BMS, Code Lists and Shema Components,” on Tuesday, Dec. 11, 2018 at 11 a.m. CST.

CARSTAR Urges Customers to Stay Winter Ready

Cold weather can create some of the harshest driving conditions of the year. The months between October and February top the list for accidents, vehicle damage and injuries.

CIECA Adds Broadly as Corporate Member

The Collision Industry Electronic Commerce Association (CIECA) announced that Broadly has joined CIECA as a corporate member.

NABR Launches BillableGenie Online Searchable Database of Insurer-Paid Not-Included Procedures

National AutoBody Research (NABR) has announced the launch of its BillableGenie online service, an independent, centralized source of actual data on insurer paid not-included procedures and operations, labor rates, labor rate concessions and other manually entered estimate line items.