State of Insurance Rating COVID-19 Weather Report #10

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. Due to continuing improvements and a slow return to normal, we will now publish this report bi-weekly.

For the past two weeks, quoting volumes have largely stabilized. Quote volumes averaged 6.9% behind projections. The data also indicates a high rate of variability in quoting volumes, either immediately preceding or following a weekend. The causation for this is unknown.

Memorial Day has been excluded from the graph below. However, this year’s holiday showed quoting volumes 35% higher than expected. This signals that working remotely has created an environment where agents can continue to quote and sell business, even on a holiday.

May Recap

Throughout May 2020, quoting volumes continuously improved week over week. With the first week of May, averaging 11.5% behind expectations. The second week being 10% behind. The third at 7.6% behind. The fourth and final week of the month settled at 7.4% below expectations.

Looking forward into June, ITC expects a gradual return to previous quoting volumes.

While all states are showing improvements, there are states that performed at higher than expected levels. Those states that reopened early in May showed drastic improvement compared to states that are only now reopening.

State

Reopening Date

Variance from Expectation

Arizona

May 15, 2020

-16.9%

California

Indefinite

-14.1%

Georgia

April 30, 2020

12.4%

Illinois

May 30, 2020

-28.7%

Indiana

May 1, 2020

-12.4%

Nevada

May 9, 2020

-18.1%

Oklahoma

April 24, 2020

9.8%

Tennessee

April 29, 2020

1.0%

Texas

April 30, 2020

0.2%

Washington

May 31, 2020

-36.3%


California has started a four-phase reopening plan. Illinois’ stay at home order expired at the end of May. The state of Washington has also started to reopen. These states were slower to reopen, and it will be interesting to see how their quoting levels improve in the coming weeks.

The Forecast

ITC predicts that quoting volumes will continue to remain below the expected quote activity, settling between 5% and 6% below quoting expectations.

Quick media cycles, social media, and a drastic shift to biased reporting have created shorter attention spans. Our tolerance for extended news on any subject is low.

The political focus is shifting from COVID-19-related lockdowns to the protests across the country. As such, worries about the pandemic will diminish, and consumerism will return.

Most of these reports have been focused on personal lines coverages. These segments of the market have remained relatively resistant to the events of the past few months. However, a substantial change is coming to the insurance industry.

Insurance carriers are now facing the looming threat of multiple lawsuits concerning not covering COVID-related business interruption policies. Couple this with significant property damage related to protests and the insurance industry is in for a tumultuous last half of the year.

Meanwhile, agents are the face of those carriers. They need to support their carriers and clients just the same. Consumers will want reassurance that their insurance will continue to cover their needs. Agents need to be ready to serve them.

Next Report

Stay tuned as June 22’s report will include the following:

  • A recap of the next two weeks.

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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State of Insurance Rating COVID-19 Weather Report #9
State of Insurance Rating COVID-19 Weather Report #9

The following weather report is the week of May 18 through May 22.