Auto Claims Data: What it Means for Claims Professionals

Utilizing accurate data is essential for claims professionals, enabling insurers to identify trends that help anticipate future claims, adjust premiums and manage risk exposure more effectively.

Data plays a critical role in forecasting costs and developing precise pricing strategies, ensuring premiums more accurately reflect the level of risk associated with different customers or groups. Today, this is especially valuable in understanding the recent surge in auto theft across the United States.

Since 2019, the average rate of motor vehicle theft has increased by 105%, according to the Council on Criminal Justice. While National Insurance Crime Bureau data shows vehicle thefts fell last year to 850,708 from 2023’s recent historic peak of more than 1 million vehicles reported as stolen in the U.S, that’s still a big number and a lot of vehicles stolen. These thefts triggered a domino effect of rising insurance claims and growing concern among policyholders and insurers alike. By closely analyzing recent auto claims data, claims professionals can better understand how these trends impact both claims and premiums.

Understanding the Auto Theft Impacts

As the value rises for vehicles and vehicle parts, auto theft has surged since 2019, often driven by social media pressure and strained financial resources. At Plymouth Rock Assurance, we are seeing auto theft claims issued through independent agents in the Northeast U.S. up 15% year-over-year.

This uptick in claims highlights a growing threat, signaling potential rises in criminal activity or other factors contributing to vehicle thefts that both insurers and policyholders must monitor.

The types of stolen cars also represent an interesting data point for claims professionals. The most stolen car in the U.S. is the Hyundai Elantra, with 48,445 thefts in 2023 alone, according to the NCIB. In addition to the Elantra, the Hyundai Sonata was reported stolen 42,813 times, and the Kia Optima 30,204 times in 2023 the NCIB data shows.

Kia vehicles are particularly popular among thieves, with social media playing a large part in recent theft trends. A TikTok “challenge” that went viral in 2022, encouraged viewers to steal and break into Kia and Hyundai vehicles. Overall, in the first half of 2023, theft claims for 2003–2023 Hyundai and Kia models were nearly seven times more frequent than those for all other vehicle brands, according to the Highway Data Loss Institute.

Hybrid vehicles are also at higher risk due to their higher concentration of precious metals, making them attractive to thieves seeking profit. These insights from claims data enable insurers to better allocate resources and implement proactive risk strategies.

As theft rates increase, insurance claims inevitably become more costly. The average claim severity for vehicles other than Hyundai and Kia was $23,876 for 2023 model year vehicles, according to the HLDI Highway Loss Data Institute. For those living in areas with rising theft rates, premiums may be adjusted to reflect the higher likelihood of filing a claim in that region. Additionally, repeated theft incidents can result in even more premium increases or changes to policy terms. Insurers must carefully assess and adjust the cost of policies and premiums to accurately reflect the growing risks posed by factors shown in the claims data.

The Role of the Claims Professional in Auto Theft Data Evaluation and Prevention

Claims professionals play a crucial role in evaluating auto claims by identifying potential fraud and verifying details to ensure legitimate payouts. However, their role extends beyond evaluation. Claims professionals also analyze historical auto theft claims data to identify trends, patterns, and potential risks, which can help insurance companies to improve their underwriting and reduce their overall risk.

Hyundai, for instance, faces heightened vulnerabilities due to a lack of engine immobilizers, a security feature that prevents a car from starting without the proper key, leading to a wave of thefts inspired by the previously mentioned viral social media videos. By analyzing new claims data and remaining up to date with auto theft prevention laws and vehicle theft news, insurers can advise on additional theft prevention measures.

By providing this proactive support, insurers can help policyholders potentially lower their theft risk, leading to fewer claims and more favorable premium rates.

Claims data is a key tool in assisting claims professionals in identifying trends. With the ability to anticipate future claims, insurers can adjust premiums to reflect the evolving risk landscape while better managing their risk exposure. This valuable data allows for more accurate forecasting and better protection for car owners.

Louis Palomeque is vice president of claims at Plymouth Rock Assurance.