Auto Insurance Task Force. HCR 47/SCR 55 of the 2018 Regular Session

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1 Auto Insurance Task Force HCR 47/SCR 55 of the 2018 Regular Session

2 State of the Automobile Insurance Market: Quick Facts (as of December 31, 2017): The voluntary market remains competitive but challenging for both private passenger auto (PPA) and commercial auto (CA). There is little competition for some commercial trucking programs, e.g. logging. The Greater New Orleans and Baton Rouge areas continue to pay the highest rates. Market-wide insurance premium increase for 2017: PPA 9.0% following 8.7% in 2016 CA 5.6% following 2.8% in 2016 In 2015, Louisiana ranked highest in PPA combined average cost of insurance at $1,405 for liability and physical damage coverages according to the most recent NAIC data.

3 Louisiana Department of Insurance Comparison of Requested Change (before action is taken) to Market Impact of Approved Changes All Filing Types - Private Passenger Automobile 10% 9% 8% 7% 6% The LIRC is abolished; all filings go to the LDI as of January 1, % 6.0% 5.9% 8.7% 7.2% 8.9% 8.7% 8.1% 5% 5.0% 4.7% 5.5% 4% 3% 4.0% 3.0% 2.9% 2.8% 2.7% 3.4% 2% 1% 0% 1.8% 1.0% 0.9% 0.5% 0.2% (JUL) Average Requested Change Market Impact of Approved Changes

4 Louisiana Department of Insurance Comparison of Requested Change (before action is taken) to Market Impact of Approved Changes All Filing Types - Commercial Automobile 16% 14% 13.3% 12% 10% 8% The LIRC is abolished; all filings go to the LDI as of January 1, % 7.2% 8.0% 6% 5.1% 5.5% 5.8% 4% 2% 0% 1.7% 0.4% 0.4% 0.1% 3.1% 1.1% 1.5% 2.8% 2.0% 2.2% 3.2% 2.8% -2% -4% -0.7% -2.2% -2.4% (JUL) Average Requested Change Market Impact of Approved Changes

5 Silver Medal Premiums $800 $700 $600 $500 $400 $300 $200 $100 $- 41.4% 30.4% 47.7% Liability Collision Comprehensive US Average LA Average 2 nd highest average overall premiums. 2 nd highest average collision premiums. 6 th highest average combined liability premiums. 8 th highest average comprehensive premiums.

6 Auto Insurance Rates by State for 2017 (Source Insure.com) 1 Michigan $2,394 2 Louisiana $1,921 3 Connecticut $1,897 4 Rhode Island $1,848 5 Florida $1,840 6 DC $1,696 7 California $1,673 8 Wyoming $1,538 9 Delaware $1, Texas $1, Oklahoma $1, Georgia $1, Arkansas $1, New Jersey $1, West Virginia $1, Kentucky $1, New York $1, Colorado $1, Arizona $1, Nevada $1, Maryland $1, Mississippi $1,326 Avg. National $1, Pennsylvania $1, Oregon $1, Hawaii $1, North Dakota $1, South Carolina $1, Massachusetts $1, Minnesota $1, Alabama $1, Montana $1, Washington $1, New Mexico $1, Kansas $1, Tennessee $1, Illinois $1, Wisconsin $1, Alaska $1, New Hampshire $1, Nebraska $1, Missouri $1, Utah $1, South Dakota $1, Virginia $1, Indiana $1, Iowa $1, North Carolina $1, Vermont $ Idaho $ Ohio $ Maine $864

7 Top 10 Most Expensive and Least Expensive States for Automobile Insurance, 2014 (Source: NAIC) Rank Most expensive Average Rank Least expensive Average 1 New Jersey $1, Idaho $ Michigan $1, Iowa $ New York $1, South Dakota $ Louisiana $1, Maine $ District of Columbia $1, North Dakota $ Florida $1, Indiana $ Delaware $1, North Carolina $ Rhode Island $1, Wisconsin $ Massachusetts $1, Nebraska $ Connecticut $1, Vermont $665.17

8 Top 10 Most Expensive and Least Expensive Cities for Auto Insurance, 2014 (Source: Nerdwallet) Rank Most expensive cities Average cost Rank Least expensive cities Average cost 1 Detroit, MI $10,723 1 Winston-Salem, NC $969 2 New Orleans, LA $4,310 2 Greensboro, NC $1,090 3 Grand Rapids, MI $4,042 3 Raleigh, NC $1,098 4 Newark, NJ $3,525 4 Durham, NC $1,101 5 Baton Rouge, LA $3,364 5 Charlotte, NC $1,123 6 Hialeah, FL $3,272 6 Boise, ID $1,222 7 Jersey City, NJ $3,267 7 Rochester, NY $1,249 8 Louisville, KY $3,256 8 Fayetteville, NC $1,295 9 Miami, FL $3,169 9 Spokane, WA $1, Philadelphia, PA $2, Montgomery, AL $1,376

9 Auto Loss Trends 4Q Moving Direct Loss Ratio 74.0% Frequency Severity Personal Commercial Average % 70.0% 68.0% 66.0% 64.0% 62.0% 60.0% 58.0% Quarter-Over- Quarter Year-Over-Year Quarter-Over- Quarter Year-Over-Year BI -0.90% -2.85% 2.2% 7.7% PD 0.15% 0.53% 0.9% 4.2% PIP -0.71% -0.42% 2.16% 3.25% COMP -0.75% -1.26% -0.19% 11.14% COLL 0.45% 2.11% -0.50% 2.07% Source: SNL Financial (S&P Global Market Intelligence) Source: ISS/NISS/ISO Personal Auto Fast Track Data 2017 Q2 3

10 Causes Solutions Urban Congestion & Road Conditions Infrastructure Investment Device Distractions Handheld Bans & Primary Enforcement Extreme Weather Events Weather Warning Systems Speed Limits Lower Speed Limits Impaired Driving Education & Enforcement Litigation Environment Tort Reform 4

11 Traffic Congestion Average Metropolitan Area Commute Time 90.0 Average Annual Delay (Hrs) per Auto Commuter Minutes LA US Baton Rouge New Orleans

12 Distracted Driving 6

13 Extreme Weather Events

14 Tort Environment Jury Trial Threshold $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 LA MD HI RI VA AL NH OK OR AK CT KY AR WV

15 Select 2018 Legislative Activity HB 619 by Huval to expand the distracted driving laws to all drivers and to make operating a handheld device unlawful. (Died in the Senate) HB 700 by McFarland to repeal and replace the seat belt gag rule to permit evidence of nonuse of seat belts for mitigation of damages. (Died in the Senate) HB 789 by Thibaut to limit the collateral source rule (Died in House Committee) SB 139 by Luneau to permit direct action in cases involving certain small businesses (Died in the Senate) SB 441 by Morrell to create the crime of reckless operation of an off-road vehicle. (Act 495)

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