However, like auto, damage is costlier to repair and replace. Despite the eventual expected reduction in frequency, the severity per accident is likely to rise with more expensive cars and parts to replace.įrom adjusting the temperature of your home remotely to security systems and water monitoring devices, home ownership is embracing the tech age and is no longer just “bricks and sticks.” The implementation of these devices may have real effect on loss mitigation, risk selection, and subsequently rates. These technological improvements, coupled with reliance on on-demand car service and the impending rise of autonomous vehicles, will affect the pricing, underwriting and loss experience for auto. With advanced safety features becoming more and more standard on new cars, annual loss costs are expected to reduce from $125Bn in 2015 to $50Bn in 2040. The auto insurance market is expected to shrink over the next 20 – 30 years. With the ownership of cars and homes seen as burdensome, a new wave of customer buying patterns and needs emerge as well as new and evolving risks. Millennials, the largest generation in US history, are just entering their peak spending years. It’s no secret that brands long-loved for reliability, stability and tangible goods have given way to digital technology, information management and social connection. Holborn recently presented at Finger Lakes Insurance Council’s (FLIC) Underwriting Roundtable on the topic of “The Future of Everything.” During the discussion, the team discussed recent trends in consumer behavior and distilled the recent smart technology trends in both the auto and homeowners the market, while examining the impact on the insurance industry.
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