InsWeb Introduces Auto Index

California-based InsWeb Corp. a producer of automobile insurance in the U.S., has introduced the InsWeb Auto Insurance Index.

The InsWeb Auto Insurance Index is designed to identify and track general pricing trends of personal auto insurance sold through the Internet. The Index suggests that as of the second quarter of 2002, prices for auto insurance nationwide have risen approximately 40 percent since the first quarter of 2000 or, roughly 16 percent annually. The results are based on hundreds of thousands of consumers who complete InsWeb’s auto insurance quote form each quarter.

“We are delighted to introduce the InsWeb Auto Insurance Index, leveraging the vast number of consumer profiles and applications available in our database,” Mark Guthrie, InsWeb’s President and CEO, said. “This index, which we believe to be the first of its kind, could be a useful early indicator of pricing activity in the personal auto insurance marketplace and therefore help both carriers and consumers react more quickly to changes.”

After nearly a decade of flat to modest price increases in the automobile insurance industry, prices have increased substantially over the past two years. During the time period analyzed, from the first quarter 2000 to the second quarter 2002, the index for 6-month policies rose 54 percent and the index for 12-month policies increased 21 percent. For example, a married couple with male aged 35 and female aged 37, driving a typical four-door sedan, with no violations and no accidents, would have paid $1,500 for a 12 month policy in 2000 and $1,800 for the same policy in 2002.

Reasons for the increases include rising claims costs driven primarily by medical costs, significantly higher vehicle repair costs, rising jury awards and continued fraud and abuse, as well as lower investment income generated by insurers, mainly due to the dramatic reduction in interest rates and the decline in the stock market.

Topics Auto