State of Insurance Rating COVID-19 Weather Report #7

May 11, 2020 Laird Rixford

ITC will continue to provide these ongoing weekly weather reports throughout this situation. These reports provide agencies and carriers a general baseline of their operations.

It has been an emotional experience over the past two months as we continue to cope with the coronavirus pandemic. This roller coaster has had many twists and turns with way too many downhills.

And, though there were a few ups near the end of April, things were still not looking terribly positive.

This week’s report changes that. While the news is encouraging, there are quite a few takeaways that are enlightening as to how we as an industry can recover.

Week of 5/4

Overall, agent and carrier quoting activities continued to improve, beating our predicted expectations. During the first full week of May, quoting and rating volume was 9.7% below ITC’s baseline rating expectations. A marked improvement from last week’s 21.3% below the baseline.

Many agents experienced a surge of quote requests during the first week of a month. This is typical even in normal conditions. So, the increase in volume this week could be due in part to this normal surge.

But, what was interesting in our data this week was how the day-to-day variability in quoting volume decreased. This provides confidence that the numbers are improving as time goes on.

State of Rating by State

In the second weather report, we analyzed state by state differences. We concluded that local, state, and federal shelter in place directives had a significant impact on state by state rating volumes.

At the time, rating volumes were depressed nationally by 32.4%. The impact was universally felt. As the situation matured, states took decidedly different directions with their response. Often discussed in detail throughout the media.

As rating improved over the past two weeks and some states reopened themselves to commerce, it was time to revisit this review. The data was telling.

In states such as Texas and Georgia where statewide shelter-in-place directives expired as of April 30, quoting volumes improved well against the baseline model and exceeded the national performance. For the week of 5/4, Texas and Georgia were respectively 2.6% and 5.2% above expected quoting volumes.

Conversely, in states such as California and Illinois where statewide shelter-in-place directives continued or even were additionally tightened, quoting volumes improved only slightly while still being well below the national averages.

For the week of 5/4, California and Illinois were 18.7% and 29.8% respectively below expected quoting volumes.

Conclusion: As states lift shelter in place directives, quoting volumes will improve drastically.

The Forecast

ITC predicts that quoting volumes will continue to remain below the expected quote activity settling within the mid-teens throughout the week.

While ITC is not advocating for the premature lifting of restrictions, we expect quoting volumes to improve quickly as those restrictions are lifted.

As trusted advisors, it is important that we advise not only our clients but also local and state leaders as to how we can return the economy back to normal.

The future of the industry and many agencies and carriers within it depend on it.

Next Report

Stay tuned as next week’s report will include the following:

  • A recap of this week.
  • Comment below on any other data metrics you want to see in this report series.

Methodology

ITC maintains a regular baseline of expected quoting volume for TurboRater. We also maintain an expectation of submission and traffic upon the Insurance Website Builder, TurboRater for Websites and TurboRater Rate Engine API platforms. 

We built the baseline on a model that reflects multi-year historical performance, usage of the platform, state demographics, and market conditions using data from ITC’s business intelligence and analytical products.

The margin of error for the agency quoting and rating baseline averages less than 1.5% as calculated daily. The data analysis excludes rates returned without a premium.

The margin of error for the online properties and submission volumes averages less than 5% as calculated weekly.

All models only attempt to predict Monday through Friday. Agency operations over a weekend have too much variability.

About the Author

Laird Rixford

As CEO, Laird Rixford is responsible for providing strategic direction and leadership for the company. Rixford has a proven executive management track record and has more than 20 years of experience in entrepreneurship and insurance technology. An expert in insurance technology and marketing, Laird is a recognized public speaker and has presented at industry events across the United States.

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