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Auto insurance industry officials respond to calls for COVID-era refunds

  • August 28, 2022

Re: “It’s time to fix Illinois’ auto insurance market,” Joe Cahill, (July 22):

Recently the Illinois Department of Insurance issued a comprehensive financial information-related “data call” for Illinois-specific automobile insurance premium information for the purpose of publishing that information on an insurer-specific basis. Despite lacking, we believe, appropriate legal authority to publicize this information in a way that protects the privacy and confidentiality of the individual insurers’ information, the department has compelled insurers to provide this information; and insurers, despite their misgivings about the lack of confidentiality and privacy protections normally afforded to them, have done their best to comply with this directive and have provided relevant financial data for the years 2019-21.

The publication of this data has automobile in calls by anti-insurance industry critics for retroactive insurance premium refunds, in addition to the more than $14 billion in premium giveback programs and credits that were provided by insurers to their customers in 2020 during the COVID- 19 pandemic crises. In addition, insurers gave more than $220 million in philanthropic contributions during COVID to support local communities.

The critics only focus on the short-term period when driving declined, but it is important for stable and accurate insurance pricing to do what insurers and most regulators have always done and look at the long-term patterns impacting driving and loss trends. The volatility of responding to short-term trends would create instability both for consumers and insurers. This could mean uncertain fluctuations for consumers and the inability to count on stability for budgeting purposes.

An analysis of highway driving data shows that at the onset of the pandemic, miles traveled declined sharply but quickly returned to pre-pandemic levels. Additionally, driving habits changed during the pandemic and they continue to show that more dangerous driving habits have emerged.

Despite people driving less during

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