What’s Driving Auto Claims Costs During Pandemic

The long-tail nature of auto bodily injury claims, in addition to insurers’ fixed claims adjustment costs, are among the reasons why insurers are not likely going to reduce auto premiums in proportion to the drop in driving observed during COVID-19.

‘I think that the market is not headed for an ongoing rate reduction,’ Intact Financial Corp. CEO Charles Brindamour said Thursday of auto.

‘In fact, I would not call this a soft market by any stretch.’

During a virtual fireside chat Thursday, TD Securities managing director Mario Mendonca asked Brindamour whether the P&C industry might go for a prolonged period of either auto premium reductions or no price increases.