This month we share insights from January through December 2020 to provide a clearer picture of claims trends. With an entire year’s worth of data, we’re able to see an inverse relationship between physical damage and bodily injury claims. As bodily injury severity continues to climb, both collision and property damage claims are experiencing a reduction in overall severity. In tandem with this pattern, claims from Uninsured Motorists (UM) continue to be elevated. This month we are providing an additional view of how coverages performed against the prior year. It remains to be seen how these trends continue to play out in 2021 as the industry begins to recover from the impacts of COVID-19.

Bodily Injury Severity

Bodily Injury severity with 90-day early settlements increased 1.1% from September to October. Overall, this is a 12% increase over the same month of the prior year. The number of claims paid and closed dropped to their lowest point in October 2020, now down 15.3% and continuing the decline that started in April 2020.

When looking at our 180-day settlement view, total U.S. bodily injury severity increased in July 2020 to 9.1% from 8.7% in June and 6.0% in March 2020. Regarding the number of claims paid and closed, the decline continued and was down to 9.8% in July, dropping more than 2 points more from June 2020.

Collision Severity

Collision severity in December was 3.7%, a slight decrease from November. Since August, we see some stability where severity increases have been between 3.7% and 4.0%. The number of paid and closed claims within 30 days was 19% lower than the same month the prior year, down further from the decline of 17.3% the month prior. This is attributable to fewer claims since March 2020 and is the lowest percentage change we’ve seen in the data. The percent of collision claims closing within one month, while higher than average earlier in the pandemic, has returned to pre-pandemic levels.

Property Damage Severity

In December, the year-over-year increase in severity is 4.8%, slightly smaller than November. Similar to collision claims, we are starting to see some stability after a 1.6 point decline since March. The number of claims paid and closed was 25.2% lower than the same month the prior year. This decline was over 2 points more than the decline in November 2020.   

Uninsured Motorist

In December, we see an increase of 8.6% in the rate of uninsured motorist claims relative to total claims compared to the 12 months before the pandemic began. The proportion of UM to total claims was 16% last month.

Looking ahead at our early indications for 2021, we see a continuation of lower claim counts. Also, results from a recent LexisNexis consumer survey suggest that most consumers expect a slow return to work commutes. This likely means we will see similar trends as experienced in the second half of 2020 throughout most of 2021.  We will continue to monitor and provide updates within our future monthly blogs. 

Note:  All percentages are based on a 12-month rolling year-over-year percentage change.