By many rights, car insurance rates ought to start coming down for some drivers. But with the looming threat of tariffs, that process might take longer.
A sterling set of results from property-and-casualty insurance carriers in 2024, particularly in auto insurance, got analysts and executives talking about renewed competition for new business with lower rates this year. Some of that now appears to be on hold.
Auto insurers had seen a wave of underwriting losses during the years of high inflation after the pandemic, as the cost of repairing a car surged. In response, they started aggressively raising premiums, leading to a surge in profitability. The U.S. overall property-and-casualty industry’s net combined ratio, a measure of underwriting margins, hit its best mark in more than a decade last year, according to S&P Global Market Intelligence.
But then in early April, personal auto insurers hit the brakes on filings with state regulators for lower rates, according to figures analyzed by economists at the Swiss Re Institute. In March, there were 482 requests filed with states for negative changes to personal auto insurance rates. In April, according to data available as of 30th of the month, there were just 95 such requests. In both months, the number of requests for rate increases outpaced those for decreases.
“It appears that personal auto insurers have stopped submitting material rate decrease requests following the tariff announcement,” Swiss Re Institute economists wrote in a recent note, citing data through April 16.
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