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April 15, 2024
INSIDE
Vol. 31#31/1470
Survey: More than half of claims already
have attorneys engaged. Page 2
Legal advertising has changed the claims
environment. Page 3
Louisiana legislators forced to face ongoing
insurance crisis. Page 9
Louisiana’s commercial auto crisis. Page 10
Ending desk-drawer rules. Page 14
AUTO INSURANCE REPORT
The Authority on Insuring Personal and Commercial Vehicles
Reprinted With Permission Of The Publisher
Please see LOUISIANA on Page 6
THE GRAPEVINE
Please see ATTORNEY on Page 2
A New Day Dawns in Louisiana
As Temple Aims to Revive Markets
If his plan works, Tim Temple will be the hero who
rescued Louisiana from the depths of an economy-crushing
auto and property insurance crisis. If his plan fails, the in-
surance commissioner’s nascent political career may well
be doomed.
And he knows it.
“Look, the positions I’m taking are not popular. I’m ad-
dressing some of the harsh realities of the challenges our
markets have had here,” Temple, 54, said in an interview at
the Louisiana Department of Insurance (LDI) ofces in
Baton Rouge last month, on a rare day off from testifying at
legislative hearings. “I’m not worried [about the next elec-
tion]. I’m here to do the job today. My job is to help create
and promote a healthy competitive insurance market.”
Temple took ofce Jan. 8 after winning the race for a
Attorneys Push Their Way Into
The Claims Processes Earlier
Trial lawyers are winning the minds – and necks and
spines – of injured drivers with aggressive advertising and
solicitation tactics, encouraging most claimants who hire an
attorney to do so even before ling the claim, according to
recent research.
Ubiquitous billboard, radio, internet and television ads
have reinforced the idea among many motorists that if they
are injured in a collision, their rst conversation should be
with an attorney, rather than an insurance company.
More than half – 57% – of 555 auto insurance claimants
with an attorney surveyed by LexisNexis Risk Solutions
last year hired the lawyer before ling the claim. The sur-
vey found that 85% of the respondents were solicited by an
attorney after the collision, and 60% heard from more than
one. Survey respondents included a mix of mostly personal
lines claimants with some commercial.
26th Auto Insurance Report
National Conference
Underway in California
For those attending the 26th
Auto Insurance Report National
Conference, welcome! For the
unlucky readers who are stuck
at the (home) ofce, we promise
to report on the proceedings, but
it won’t be the same as being in
Dana Point, California, with 330
leaders from all segments of the
auto insurance industry.
Find out what the fuss is all
about. Make a plan to come next
year!
AIR
AUTO INSURANCE REPORT
Page 2
April 15, 2024
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“I think of it as a battle for trust that the
attorneys seem to be winning,” said Tanner
Sheehan, vice president and general manager of
claims solutions at LexisNexis. The survey re-
sults showed that many claimants who hire attor-
neys fear that insurance carriers won’t play fair
and have anxiety about what they assume will be
an intimidating claims process.
Attorneys also have the advantage of the
“why not?” factor, Sheehan said. “The public has
heard the advertising; they understand that you
only pay if you win.”
Higher costs from attorney-involved claims
start well before litigation. Trial lawyers use a
variety of tactics to discover policy limits and
then direct clients to specic doctors and clinics
that encourage additional and sometimes unnec-
essary procedures to build the eventual award to
the limit. (AIR 8/28/23)
Data from claims administrator Sedgwick fo-
cused exclusively on commercial auto insurance
mirrored the LexisNexis’ survey ndings, show-
ing that early attorney involvement has been in-
creasing for the last ve years.
One of the top reasons for earlier attorney in-
volvement is the “signicant increase in attorney
advertising,” said Max Koonce, chief claims of-
cer at Sedgwick.
Another reason is that while consumers ex-
pect immediate results in an on-demand world,
the process of settling third-party bodily injury
claims is slow. Claimants see an attorney as a
way to force the process to move faster. Ironi-
cally, legal representation and the potential for
litigation can have the opposite effect.
People who are injured often seek someone
to “recognize the needs that they have,” Koonce
said. “And sometimes that attention doesn’t hap-
pen fast enough. And they may feel like they
need to go out and get a third party involved.”
The fact that more than half of attorney-
represented claimants hire a lawyer before rst
ATTORNEY Continued from Page 1
Please see ATTORNEY on Page 3
LexisNexis Survey: When Did You
Decide to Hire An Attorney?
Percent of Respondents
Before submitting
the claim
After
submitting
the claim but
before receiving
initial settlement
oer
After
receiving
initial
settlement
oer
Yes
No
Don’t
Recall/
Not Sure
Did Your Attorney Encourage You
To Seek Additional Treatment?
Percent of Respondents
Source: LexisNexis Risk Solutions 2023 survey of
555 auto insurance claimants who had hired an
attorney.
April 15, 2024
Page 3
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AUTO INSURANCE REPORT
Reprinted With Permission Of The Publisher
notice of loss makes it difcult for insurers to
follow the conventional wisdom for limiting liti-
gation.
“Moving quickly to resolve a claim has long
been seen as a way to mitigate attorney involve-
ment, but now we know that’s only possible half
the time,” Sheehan said.
By the end of 2022, about 57% of commer-
cial auto liability claims that went to litigation
had attorney representation in place within 24
hours of the claim being reported, an increase of
almost 15 percentage points compared to 2018,
according to Sedgwick’s claims analysis.
While litigated claims make up less than 1%
of all claims, they may account for as much as
50% of all losses depending on the line of insur-
ance, according to Sedgwick.
Rising casualty costs, driven partially by in-
creased attorney participation, have led carriers
to adjust their internal case reserving policy to
set aside more funds for any claim with an attor-
ney attached.
“We weren’t reserving our claims at a high
enough level to consider all the attorney involve-
ment,” said an executive at an insurance com-
pany that specializes in
personal auto insurance
policies with minimum
limits. Adjustments made
in the last two years ap-
pear to have improved
results, the executive said.
“We now know what it’s
going to do to us, and we
can’t be surprised.”
While drivers are
largely familiar with at-
torney messaging and the
promises of large awards, they are less knowl-
edgeable about attorney tactics and concepts like
third-party litigation funding – where investors
who are not party to the claim pay a portion of
litigation costs for a share of the award – nor the
impact lawsuits have on
insurance affordability.
A recent survey by
the American Property
Casualty Insurance As-
sociation (APCIA) and
Munich Re found that
59% of respondents were
unfamiliar with third-
party litigation funding,
and 47% were not aware
that the plaintiff lawyer
in a civil lawsuit is likely to receive a signicant
portion of the jury award or settlement.
But about 88% of the 2,000 people surveyed
believe “there should be full transparency and
disclosure of all who have a nancial stake in
a civil lawsuit.” Some 86% agreed state and
federal lawmakers should address abuses of the
legal system, including undisclosed third-party
funding.
“Most Americans are not necessarily aware
of the negative impact of these plaintiffs’ bar tac-
tics,” said Maura Freiwald, head of casualty at
Munich Re. “It’s the investors – not necessarily
the policyholders and the parties that are injured
– that are going to be beneting from all these
lawsuits.”
Last year, trial lawyers spent more than $2.4
billion on local TV, print, billboard and radio
ads across the U.S., a 5% increase over 2022,
according to estimates from the American Tort
Reform Association. A large portion of spend-
ing was by aggregator businesses that recruit
potential clients and sell the information to law
rms.
“Legal advertising really has two primary
ATTORNEY from Page 2
Please see ATTORNEY on Page 4
Max Koonce
Sedgwick
Tanner Sheehan
LexisNexis
Last year, trial lawyers spent
more than $2.4 billion on local
TV, print, billboard and radio ads
across the U.S.
AUTO INSURANCE REPORT
Page 4
April 15, 2024
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prior permission of the publisher. For information email [email protected].
Reprinted With Permission Of The Publisher
The early involvement of
attorneys is pressuring carriers
to improve claims response
times.
purposes – one, of course, is soliciting clients,
they want more business,” said Jim Whittle,
vice president and counsel with the APCIA.
“But secondarily, they are, in effect, poison-
ing the well against defendants and insurers.
They scare people about big trucks, they scare
people about insurers. All of that plays into their
ultimate goal, which is to receive as much mon-
ey as they can from any claim that they receive.”
The American Association for Justice, the
association for trial lawyers, did not respond to
an interview request.
Property and casualty insurers are no adver-
tising slouches, either, spending more than $8.8
billion in 2022, according to Dowling & Part-
ners Securities. (AIR 5/15/23)
The increase in early attorney involvement
in claims suggests that while the P/C industry’s
massive advertising budget has trained con-
sumers to shop for lower rates, it has not suc-
ceeded at convincing them that they are “in good
hands,” or that the carrier is “on your side” and
“like a good neighbor.”
Aggressive attorney advertising and solicita-
tion are piggybacking off the same general mis-
trust in corporations and insurance companies
that have led to “nuclear” jury verdicts for truck-
ing accident victims and the phenomenon of so-
cial ination, claims executives say.
Social ination is the idea that socioeco-
nomic, legislative and litigation factors have led
to more frequent, severe and sometimes unneces-
sary claim payouts that cause insurance costs to
increase more quickly than standard economic
ination.
The early involvement of attorneys is pres-
suring carriers to improve claims response times
by training casualty
adjusters to call injured
drivers more quickly –
rather than mailing a let-
ter – in an attempt to be
the rst friendly voice a
claimant hears.
“That initial contact
is extremely important,”
Koonce said. Adjusters
must focus on empathy
and clearly communicate
the process “to show that we’re going to follow
up.”
The P/C industry is making a concerted push
against the plaintiff’s bar with tort reform laws
in dozens of states this year and new public rela-
tions campaigns – like one centered around the
recent APCIA/Munich Re survey.
But P/C industry tort reform efforts are often
stymied by the strong plaintiff’s bar lobby. Just
four states have litigation funding laws – Wis-
consin, West Virginia, Indiana and Montana
– despite repeated attempts in more than a dozen
states. Governors in Indiana and West Virginia
signed new laws in March expanding the scope
of their states’ existing litigation nance laws.
This year, 18 states and the District of Co-
lumbia are considering third-party funding
reforms, including bills that would require plain-
tiffs to disclose outside funding sources, accord-
ing to the APCIA.
“If there’s an unknown third party who’s
actually pushing a case, courts certainly should
know about that,” Whittle said. “Even jurors
might have a reason to know about that, because
it goes to the credibility of witnesses and the le-
gitimacy of damages.”
While carriers look to curtail litigation fund-
ing through legislation, the industry has explod-
ed. In 2023, “The Westeet Insider,” a report that
provides an annual snapshot of commercial liti-
gation funding, reported $15.2 billion in assets
ATTORNEY Continued from Page 3
Please see ATTORNEY on Page 5
Maura Freiwald
MunichRe
April 15, 2024
Page 5
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Reprinted With Permission Of The Publisher
under management by rms in the space, a 60%
increase since the rst report in 2019. Westeet’s
research showed $2.7 billion in new commercial
deals in 2023, a 14% decline from 2022. West-
eet said the decline was due to higher interest
rates, “not a reection of softening demand.”
Whittle said states also need stronger truth-
in-advertising laws that would require attorneys
to include disclaimers stating that large awards
promoted in ads are not representative of the av-
erage claim.
Advertising was one of many reasons claim-
ants who sought an attorney cited for doing so,
according to the LexisNexis survey.
Fifteen percent said they hired an attorney
because they didn’t think the insurance company
would act fairly, 18% said it was because the
other driver was at fault, 17% said they thought
the claims process would be overwhelming, 12%
said they would be dealing with the other driv-
er’s insurance company instead of their own, and
12% said the attorney suggested they could gain
compensation beyond their expenses.
Respondents could choose more than one
answer to describe how they decided which at-
torney to hire: 40% hired based on media and ad-
vertising, 58% had a personal referral and 47%
said they found their attorney on their own or the
ofce was nearby.
Once a claimant has an attorney, a quarter
of respondents said the lawyer was “primarily”
responsible for setting their medical treatment
plan, and 71% said their attorney encouraged
them to seek additional treatment.
Sheehan said LexisNexis commissioned the
survey in August 2023 after carriers made it clear
that this was the primary area of concern.
“No carriers were surprised that the attorneys
are involved,” he said. “They just didn’t have
numbers to say how involved.”
The survey showed that attorneys heavily
solicited accident victims regardless of age, in-
come, severity of injury or location.
More than 90% of
claimants with household
incomes of $100,000 or
more who hired an attor-
ney were solicited. The
gure was 85% for those
with household incomes
between $60,000 and
$99,000 and nearly 80%
of those with incomes
below $60,000. About
half the claimants with
household incomes above $100,000 received
solicitations from more than one attorney; up to
66% of lower-income households had multiple
solicitations.
The frequent solicitation of claimants imme-
diately after an accident reveals that American
Bar Association (ABA) ethics rules and incon-
sistent state laws and regulations are having little
impact. Some laws require attorneys to wait a set
number of days or weeks after an accident before
soliciting clients. State bar associations generally
follow ABA ethics rules that can disbar attorneys
who pay “runners” or “cappers” to either solicit
on the behalf of lawyers or notify them of recent
accidents – often by using informants at towing
companies or inside hospitals. Not all states have
laws with criminal penalties.
In some states, like Georgia, which passed
a law in 2014 restricting the use of cappers and
other tactics, it’s illegal to scrape accident re-
ports for potential client leads. People involved
in accidents or their attorneys must make a writ-
ten request to obtain accident reports.
Other states make it incredibly easy for attor-
neys to collect trafc accident reports to identify
ATTORNEY from Page 4
Better training of claims
adjusters could help counter
the eectiveness of attorney
solicitations.
Please see ATTORNEY on Page 6
Jim Whittle
APCIA
AUTO INSURANCE REPORT
Page 6
April 15, 2024
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Reprinted With Permission Of The Publisher
driguez said. The effec-
tiveness of current claims
fraud databases is limited
because the data isn’t
standardized across the
industry. “If carriers don’t
all populate the same
information, you can’t ex-
tract the data effectively,”
she said.
Carriers also hesitate
to collaborate for obvious
competitive reasons and because of concerns that
it may violate antitrust statutes. Rodriguez said
that so long as carriers remain mindful of the
rules, they can share claims data legally within
the guidelines.
Meanwhile, the plaintiff’s bar is well orga-
nized, she said. Trial lawyers attend trade shows
just like any other industry to learn strategies
and trade tactics. They also exchange informa-
tion online about which insurance companies are
slow to respond to claims, and even which indi-
vidual adjusters or departments are softer targets.
“They’re using data more effectively than
claims organizations,” she said, “because they
are working together.”
AIR
State Market Focus: LOUISIANA
Continued from Page 1
Please see LOUISIANA on Page 7
four-year term by default in August when his
only opponent dropped out. James Donelon,
who served as commissioner for nearly 18 years
and beat Temple in the 2019 race, announced in
March 2023 that he would not run for re-election
and last month joined the law rm McGlinchey
Stafford.
In the interview, Temple talked about why he
wanted to become insurance commissioner – the
political equivalent of running into a burning
building – and his approach to putting out the
re. He has proposed a package of legislative
reforms and changes to regulatory culture that he
expects will make the state more attractive – or
more precisely, less scary – for insurance com-
panies, in part by eliminating the laws that make
Louisiana an outlier.
“I just thought that the [prior] leadership
didn’t have a focus on creating a healthy indus-
try, which I believe the consumers benet from,”
Temple said. “If we can make the fundamental
changes in Louisiana to make us a more attrac-
tive state for insurance companies to come to and
for insurance companies to stay in and operate
in, then that availability leads to affordability and
that, at the end of the day, means more money in
people’s pockets.”
The primary aim is to rein in excessive litiga-
potential clients. The Missouri State Highway
Patrol, for example, publicly posts accident re-
ports to its website within hours of a collision.
Reports include the names of people involved
in the crash, the severity of their injuries, their
insurance carrier, the model of their vehicle and
the hospital where they were transported. Mis-
souri Bar Association rules prohibit lawyers
from soliciting clients by phone or in person, but
they allow mail solicitations so long as the ier
is marked “advertisement.”
Better training of claims department em-
ployees could help counter the effectiveness of
attorney solicitations. Claims consultant Claudia
Rodriguez, former vice president of claims for
Auto Club Enterprises, suggested that carriers
do a better job managing the workload of casu-
alty adjusters and have processes to funnel more
complicated claims to those with more experience.
Insurers also need to train adjusters to priori-
tize injury claims by immediately requesting po-
lice accident reports and promptly calling injured
drivers and passengers.
There is also a need for better data sharing
among carriers to identify the patterns of attor-
neys and the doctors they often work with, Ro-
ATTORNEY from Page 5
Claudia Rodriguez
Claims Consultant
April 15, 2024
Page 7
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AUTO INSURANCE REPORT
Reprinted With Permission Of The Publisher
Auto Insurance Profit Margins
Ten-Year Summary, Percent of Direct Premiums Earned
Louisiana
Line of Business
Personal Auto Liab
Personal Auto Phys
Personal Auto Total
Comm. Auto Liab
Comm. Auto Phys
Comm. Auto Total
Note: Profit calculations are by Auto Insurance Report using data from the National Association of Insurance
Commissioners. Calculations are estimates, some based on national averages.
Avg
Total
Profit
1.1
-1.3
0.3
-15.6
4.8
-12.3
Total All Lines*
-5.0
*Auto; Home, Farm & Commercial Multiperil; Fire; Allied; Inland Marine; Med Malpractice; Other Liability; Workers Comp; All Other
2018
Total
Profit
0.1
3.4
1.4
-9.7
-13.0
5.8
13.1
0.7
6.0
2.8
-0.5
-3.1
11.4
13.3
2012
Total
Profit
0.5
13.7
5.2
-23.3
-29.6
10.8
9.2
2013
Total
Profit
12.1
-1.5
-2.9
-2.0
-8.2
-10.1
1.6
2014
Total
Profit
14.8
-2.0
7.5
1.5
-11.2
-16.0
12.1
2015
Total
Profit
12.6
-4.4
4.2
-1.1
-12.9
-17.9
11.0
2016
Total
Profit
-11.9
-7.8
-29.2
-15.7
-15.4
-14.0
-22.6
2017
Total
Profit
13.0
-2.1
7.9
1.6
-10.7
-13.7
5.8
2019
Total
Profit
10.3
7.4
10.9
8.6
-18.5
-25.1
16.1
2022
Total
Profit
12.2
0.9
-1.6
-0.1
-3.9
-7.6
16.1
2020
Total
Profit
-43.1
12.3
-0.3
7.8
-11.8
-14.6
3.5
2021
Total
Profit
-83.0
7.7
-23.3
-3.4
-6.9
-6.9
-6.6
Please see LOUISIANA on Page 8
tion – addressing bad faith, direct action, the col-
lateral source rule and litigation funding – while
providing carriers exibility to increase rates.
For property insurance, the plan also includes
scrapping a law that prevents carriers from non-
renewing customers after three years as well as a
push for homeowners to install more hurricane-
resistant roofs.
If it’s an ambitious agenda for a political neo-
phyte, the way Temple sees it, he has no choice.
“I entered the job in the deepest property
insurance crisis the state has ever experienced,
reeling from four hurricanes – with two the
strongest the state has ever experienced within a
12-month period,” Temple said.
“So when I say the deepest, it’s not just
homeowners. It’s homeowners, it’s auto, it’s
commercial property, commercial trucking, it’s
ood. Our citizens, no matter what business
you’re in or where you live, they are being im-
pacted directly by this crisis.”
Temple grew up in the insurance business
– his father, the late Aubrey Temple Jr., co-
founded Amerisafe Insurance Co. and was
founding chairman of the Louisiana Workers’
Compensation Corp. The younger Temple then
worked in reinsurance and managed catastrophe
claims, including for the BP Oil spill, before
running Temptan, the family-owned investment
State Market Focus: LOUISIANA
Continued from Page 6
Tim Temple
Louisiana Insurance Commissioner
AUTO INSURANCE REPORT
Page 8
April 15, 2024
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Reprinted With Permission Of The Publisher
Group Name
Personal Auto Insurers
Groups Ranked by Total 2022 Direct Premium Written (000)
2022
Premium
Mkt
share
2022
Loss
Ratio
2022
Louisiana
2020
Premium
Mkt
share
2020
Loss
Ratio
2020
2021
Premium
Mkt
share
2021
Loss
Ratio
2021
State Farm Mutual
29.1
$1,445,395
83.3
28.6
$1,356,379
57.7
28.1
$1,358,800
81.6
%
%
%
%
%
%
Progressive Corp.
19.5
$969,832
65.2
18.0
$856,799
55.4
18.9
$913,362
74.5
%
%
%
%
%
%
Allstate Corp.
13.1
$652,243
66.3
13.1
$619,847
55.4
12.7
$613,154
67.6
%
%
%
%
%
%
Berkshire Hathaway/Geico
11.6
$576,150
75.5
11.9
$566,395
68.2
12.7
$614,153
77.7
%
%
%
%
%
%
USAA Insurance Group
5.6
$278,469
96.5
6.1
$288,934
56.3
5.6
$270,225
81.3
%
%
%
%
%
%
Southern Farm Bureau Casualty
5.4
$269,591
79.4
4.8
$229,854
59.3
5.0
$239,884
85.5
%
%
%
%
%
%
GoAuto Insurance Co.
3.1
$152,089
74.9
3.5
$166,991
65.6
3.5
$167,364
72.1
%
%
%
%
%
%
Liberty Mutual
2.9
$144,223
64.2
3.3
$158,607
44.4
3.1
$148,106
52.8
%
%
%
%
%
%
Shelter Insurance
1.5
$74,703
71.8
1.5
$68,900
68.7
1.4
$69,088
73.7
%
%
%
%
%
%
Safeway Insurance
1.2
$60,791
71.6
1.3
$60,482
58.3
1.2
$58,208
66.0
%
%
%
%
%
%
Old American
1.1
$52,163
72.3
1.1
$53,211
55.1
1.3
$62,190
75.2
%
%
%
%
%
%
Farmers Insurance Group
0.8
$41,352
70.1
1.0
$46,824
63.8
0.9
$44,204
69.7
%
%
%
%
%
%
American National Insurance
0.8
$41,097
63.4
1.0
$45,254
54.8
0.9
$43,401
70.3
%
%
%
%
%
%
Root Insurance Co.
0.7
$33,078
85.5
0.6
$27,993
85.2
0.9
$42,209
103.0
%
%
%
%
%
%
Kemper Corp.
0.6
$29,987
63.5
0.9
$42,361
57.2
0.8
$39,287
67.9
%
%
%
%
%
%
Auto Club Exchange Group (SoCal)
0.4
$21,703
59.5
0.4
$20,316
60.7
0.4
$21,108
68.3
%
%
%
%
%
%
Hartford Financial Services
0.4
$20,396
54.5
0.5
$22,972
55.7
0.4
$21,426
55.4
%
%
%
%
%
%
Hanover Insurance Group
0.4
$19,001
61.6
0.4
$17,151
55.5
0.3
$16,037
65.1
%
%
%
%
%
%
Horace Mann Educators Corp.
0.3
$16,259
82.1
0.4
$18,158
65.3
0.4
$17,379
76.0
%
%
%
%
%
%
Markel Corp.
0.2
$11,860
46.0
0.2
$8,468
53.6
0.2
$9,701
79.5
%
%
%
%
%
%
LA Farm Bureau Mutual Ins Co.
0.2
$10,405
86.1
0.3
$15,403
65.5
0.3
$11,989
89.3
%
%
%
%
%
%
American Family Insurance Group
0.2
$8,645
64.3
0.3
$14,333
63.8
0.3
$14,350
55.9
%
%
%
%
%
%
Tokio Marine Group/PURE
0.2
$8,380
61.2
0.2
$6,956
59.8
0.2
$7,324
87.3
%
%
%
%
%
%
Chubb Ltd.
0.1
$5,890
70.9
0.1
$5,116
98.4
0.1
$4,842
75.2
%
%
%
%
%
%
Amica Mutual Insurance Co.
0.1
$4,671
142.1
0.1
$4,806
40.5
0.1
$3,395
71.7
%
%
%
%
%
%
Tiptree Inc.
0.1
$3,149
-39.4
0.1
$2,944
-199.9
0.1
$3,322
39.4
%
%
%
%
%
%
Munich Re/American Modern
0.1
$2,578
80.2
0.0
$1,108
64.7
0.1
$2,292
73.8
%
%
%
%
%
%
American International Group
0.0
$2,229
92.1
0.1
$5,497
61.6
0.1
$5,196
72.3
%
%
%
%
%
%
Vault Reciprocal Exchange
0.0
$1,871
100.6
0.0
$119
126.1
0.0
$1,064
65.2
%
%
%
%
%
%
Sentry Insurance Mutual
0.0
$1,612
64.5
0.0
$1,006
65.3
0.0
$1,272
59.6
%
%
%
%
%
%
Travelers Companies Inc.
0.0
$864
41.7
0.0
$1,053
82.7
0.0
$993
15.6
%
%
%
%
%
%
Clearcover Insurance Co.
0.0
$771
87.5
0.0
$412
72.0
0.0
$1,094
98.0
%
%
%
%
%
%
Pharmacists Mutual
0.0
$689
88.4
0.0
$1,082
153.7
0.0
$846
120.4
%
%
%
%
%
%
ECM Insurance
0.0
$629
30.3
0.1
$5,135
416.8
0.1
$4,695
85.3
%
%
%
%
%
%
California Casualty
0.0
$545
80.3
0.0
$684
91.1
0.0
$641
55.6
%
%
%
%
%
%
Producer's National Corp.
0.0
$352
61.5
0.0
$0
0.0
$67
98.2
%
%
%
%
%
%
Spartan Insurance Co.
0.0
$116
0.0
0.0
$131
0.0
0.0
$106
0.0
%
%
%
%
%
%
Assurant Inc.
0.0
$57
-24.8
0.0
$681
46.7
0.0
$38
73.1
%
%
%
%
%
%
Global Indemnity
0.0
$54
14.1
0.0
$751
446.5
0.0
$1,173
43.3
%
%
%
%
%
%
Source: S&P Global Market Intelligence and the Auto Insurance Report database.
Loss ratio = incurred losses/direct premium earned and does not include dividends or loss adjustment expense.
Statewide Totals
$4,963,963
75.0
$4,748,431
58.8
$4,834,130
75.9
%
%
%
Group Name
Personal Auto Insurers
Groups Ranked by Total 2022 Direct Premium Written (000)
2022
Premium
Mkt
share
2022
Loss
Ratio
2022
Louisiana
2020
Premium
Mkt
share
2020
Loss
Ratio
2020
2021
Premium
Mkt
share
2021
Loss
Ratio
2021
State Farm Mutual
29.1
$1,445,395
83.3
28.6
$1,356,379
57.7
28.1
$1,358,800
81.6
%
%
%
%
%
%
Progressive Corp.
19.5
$969,832
65.2
18.0
$856,799
55.4
18.9
$913,362
74.5
%
%
%
%
%
%
Allstate Corp.
13.1
$652,243
66.3
13.1
$619,847
55.4
12.7
$613,154
67.6
%
%
%
%
%
%
Berkshire Hathaway/Geico
11.6
$576,150
75.5
11.9
$566,395
68.2
12.7
$614,153
77.7
%
%
%
%
%
%
USAA Insurance Group
5.6
$278,469
96.5
6.1
$288,934
56.3
5.6
$270,225
81.3
%
%
%
%
%
%
Southern Farm Bureau Casualty
5.4
$269,591
79.4
4.8
$229,854
59.3
5.0
$239,884
85.5
%
%
%
%
%
%
GoAuto Insurance Co.
3.1
$152,089
74.9
3.5
$166,991
65.6
3.5
$167,364
72.1
%
%
%
%
%
%
Liberty Mutual
2.9
$144,223
64.2
3.3
$158,607
44.4
3.1
$148,106
52.8
%
%
%
%
%
%
Shelter Insurance
1.5
$74,703
71.8
1.5
$68,900
68.7
1.4
$69,088
73.7
%
%
%
%
%
%
Safeway Insurance
1.2
$60,791
71.6
1.3
$60,482
58.3
1.2
$58,208
66.0
%
%
%
%
%
%
Old American
1.1
$52,163
72.3
1.1
$53,211
55.1
1.3
$62,190
75.2
%
%
%
%
%
%
Farmers Insurance Group
0.8
$41,352
70.1
1.0
$46,824
63.8
0.9
$44,204
69.7
%
%
%
%
%
%
American National Insurance
0.8
$41,097
63.4
1.0
$45,254
54.8
0.9
$43,401
70.3
%
%
%
%
%
%
Root Insurance Co.
0.7
$33,078
85.5
0.6
$27,993
85.2
0.9
$42,209
103.0
%
%
%
%
%
%
Kemper Corp.
0.6
$29,987
63.5
0.9
$42,361
57.2
0.8
$39,287
67.9
%
%
%
%
%
%
Auto Club Exchange Group (SoCal)
0.4
$21,703
59.5
0.4
$20,316
60.7
0.4
$21,108
68.3
%
%
%
%
%
%
Hartford Financial Services
0.4
$20,396
54.5
0.5
$22,972
55.7
0.4
$21,426
55.4
%
%
%
%
%
%
Hanover Insurance Group
0.4
$19,001
61.6
0.4
$17,151
55.5
0.3
$16,037
65.1
%
%
%
%
%
%
Horace Mann Educators Corp.
0.3
$16,259
82.1
0.4
$18,158
65.3
0.4
$17,379
76.0
%
%
%
%
%
%
Markel Corp.
0.2
$11,860
46.0
0.2
$8,468
53.6
0.2
$9,701
79.5
%
%
%
%
%
%
LA Farm Bureau Mutual Ins Co.
0.2
$10,405
86.1
0.3
$15,403
65.5
0.3
$11,989
89.3
%
%
%
%
%
%
American Family Insurance Group
0.2
$8,645
64.3
0.3
$14,333
63.8
0.3
$14,350
55.9
%
%
%
%
%
%
Tokio Marine Group/PURE
0.2
$8,380
61.2
0.2
$6,956
59.8
0.2
$7,324
87.3
%
%
%
%
%
%
Chubb Ltd.
0.1
$5,890
70.9
0.1
$5,116
98.4
0.1
$4,842
75.2
%
%
%
%
%
%
Amica Mutual Insurance Co.
0.1
$4,671
142.1
0.1
$4,806
40.5
0.1
$3,395
71.7
%
%
%
%
%
%
Tiptree Inc.
0.1
$3,149
-39.4
0.1
$2,944
-199.9
0.1
$3,322
39.4
%
%
%
%
%
%
Munich Re/American Modern
0.1
$2,578
80.2
0.0
$1,108
64.7
0.1
$2,292
73.8
%
%
%
%
%
%
American International Group
0.0
$2,229
92.1
0.1
$5,497
61.6
0.1
$5,196
72.3
%
%
%
%
%
%
Vault Reciprocal Exchange
0.0
$1,871
100.6
0.0
$119
126.1
0.0
$1,064
65.2
%
%
%
%
%
%
Sentry Insurance Mutual
0.0
$1,612
64.5
0.0
$1,006
65.3
0.0
$1,272
59.6
%
%
%
%
%
%
Travelers Companies Inc.
0.0
$864
41.7
0.0
$1,053
82.7
0.0
$993
15.6
%
%
%
%
%
%
Clearcover Insurance Co.
0.0
$771
87.5
0.0
$412
72.0
0.0
$1,094
98.0
%
%
%
%
%
%
Pharmacists Mutual
0.0
$689
88.4
0.0
$1,082
153.7
0.0
$846
120.4
%
%
%
%
%
%
ECM Insurance
0.0
$629
30.3
0.1
$5,135
416.8
0.1
$4,695
85.3
%
%
%
%
%
%
California Casualty
0.0
$545
80.3
0.0
$684
91.1
0.0
$641
55.6
%
%
%
%
%
%
Producer's National Corp.
0.0
$352
61.5
0.0
$0
0.0
$67
98.2
%
%
%
%
%
%
Spartan Insurance Co.
0.0
$116
0.0
0.0
$131
0.0
0.0
$106
0.0
%
%
%
%
%
%
Assurant Inc.
0.0
$57
-24.8
0.0
$681
46.7
0.0
$38
73.1
%
%
%
%
%
%
Global Indemnity
0.0
$54
14.1
0.0
$751
446.5
0.0
$1,173
43.3
%
%
%
%
%
%
Source: S&P Global Market Intelligence and the Auto Insurance Report database.
Loss ratio = incurred losses/direct premium earned and does not include dividends or loss adjustment expense.
Statewide Totals
$4,963,963
75.0
$4,748,431
58.8
$4,834,130
75.9
%
%
%
Continued from Page 7
State Market Focus: LOUISIANA
rm. It’s not all that surprising that the wealthy
Republican with a long insurance career is an
unabashed advocate for free-market solutions to
solve the crisis.
Temple’s legislative proposals are not new.
Some measures reverse populist policies put in
place to limit rate increases and nonrenewals and
to give consumers more leverage against insurers
by making it easier to sue. His proposed legal re-
forms, in particular, have long been on the agen-
da of insurers and the broader business commu-
nity. However, they could not previously muster
the political support necessary for passage in a
state where the trial bar holds great sway.
Today, there is strong momentum for change,
driven by a deepening insurance crisis, conserva-
tive Republican supermajorities in both legisla-
tive chambers and the backing of most measures
by Republican Gov. Jeff Landry. While Landry
has broken from the insurance industry position
on some issues, he is a champion of their cause
when compared to former two-term Democratic
Please see LOUISIANA on Page 9
April 15, 2024
Page 9
Warning: Auto Insurance Report is a condential, copyrighted newsletter for subscribers only.
No part of this publication may be shared outside of the subscribing organization without
prior permission of the publisher. For information email [email protected].
AUTO INSURANCE REPORT
Reprinted With Permission Of The Publisher
Group Name
Commercial Auto Insurers
Groups Ranked by Total 2022 Direct Premium Written (000)
2022
Premium
Mkt
share
2022
Loss
Ratio
2022
Louisiana
2020
Premium
Mkt
share
2020
Loss
Ratio
2020
2021
Premium
Mkt
share
2021
Loss
Ratio
2021
Progressive Corp.
16.5
$173,295
79.3
12.6
$108,456
75.5
14.5
$143,179
86.3
%
%
%
%
%
%
Skyward Specialty Insurance
8.0
$83,774
41.9
8.4
$72,447
64.6
8.2
$80,741
70.8
%
%
%
%
%
%
Travelers Companies Inc.
7.7
$81,334
60.4
8.6
$73,775
84.5
7.5
$73,628
63.9
%
%
%
%
%
%
Zurich Insurance Group
4.9
$51,950
109.4
5.3
$45,631
83.7
4.6
$45,673
122.6
%
%
%
%
%
%
Berkshire Hathaway Inc.
4.6
$48,051
39.6
5.7
$48,835
79.2
5.0
$49,658
58.2
%
%
%
%
%
%
State Farm Mutual
4.3
$45,204
90.7
2.8
$24,402
60.9
4.4
$43,499
101.7
%
%
%
%
%
%
Clear Blue Insurance
4.1
$42,828
127.6
4.9
$42,053
49.6
4.4
$43,132
58.3
%
%
%
%
%
%
American International Group
3.6
$37,493
63.2
3.2
$27,863
125.7
3.6
$35,199
86.1
%
%
%
%
%
%
Old Republic International Corp.
3.1
$32,493
94.5
2.5
$21,797
80.6
2.5
$24,337
77.1
%
%
%
%
%
%
Allstate Corp.
2.7
$28,299
124.6
2.6
$22,684
114.4
3.0
$29,414
58.2
%
%
%
%
%
%
Liberty Mutual
2.6
$27,024
89.6
2.8
$24,299
98.8
2.5
$24,755
88.1
%
%
%
%
%
%
CNA Financial Corp.
2.3
$24,399
100.2
2.7
$22,765
67.3
2.4
$23,684
97.1
%
%
%
%
%
%
Gray & Co.
1.9
$19,604
55.5
0.0
$0
2.0
$19,856
37.7
%
%
%
%
%
%
Hartford Financial Services
1.7
$18,197
87.8
1.5
$12,801
49.5
2.0
$19,241
61.8
%
%
%
%
%
%
W. R. Berkley Corp.
1.7
$17,697
61.0
1.8
$15,033
47.6
1.7
$17,121
85.0
%
%
%
%
%
%
Fairfax Financial Holdings
1.7
$17,542
60.9
1.8
$15,100
43.5
1.5
$14,722
57.3
%
%
%
%
%
%
Nationwide Mutual Group
1.7
$17,386
63.5
2.3
$19,912
102.1
1.9
$19,068
61.5
%
%
%
%
%
%
AmTrust Financial Services
1.7
$17,311
100.3
1.3
$11,182
58.4
1.4
$13,948
57.0
%
%
%
%
%
%
Chubb Ltd.
1.5
$16,024
130.0
1.8
$15,660
117.3
1.6
$15,716
150.8
%
%
%
%
%
%
EMC Insurance Companies
1.4
$15,087
57.4
1.8
$15,842
61.0
1.7
$16,521
64.3
%
%
%
%
%
%
Great American Insurance
1.4
$14,673
53.9
1.7
$14,223
77.5
1.6
$15,490
22.8
%
%
%
%
%
%
Federated Mutual Group
1.4
$14,586
47.8
1.5
$12,821
102.4
1.4
$13,664
67.0
%
%
%
%
%
%
Everest Re
1.4
$14,541
46.4
1.3
$11,235
48.7
1.1
$11,396
51.1
%
%
%
%
%
%
FCCI Mutual Insurance Holding Co.
1.3
$13,285
69.4
1.5
$12,584
60.9
1.4
$13,348
59.7
%
%
%
%
%
%
Arch Capital Group Ltd.
1.2
$12,758
69.6
1.1
$9,422
109.1
1.3
$13,185
99.4
%
%
%
%
%
%
United Fire Group Inc.
1.1
$11,999
80.4
1.9
$16,064
100.7
1.4
$13,515
86.7
%
%
%
%
%
%
STARR Cos.
0.9
$9,386
40.1
1.6
$13,852
103.3
1.4
$13,502
54.1
%
%
%
%
%
%
Hanover Insurance Group
0.8
$8,367
57.8
1.0
$8,708
114.0
0.9
$9,247
100.6
%
%
%
%
%
%
GuideOne Insurance
0.7
$7,083
39.3
0.5
$4,511
84.8
0.6
$6,329
40.7
%
%
%
%
%
%
Prime Insurance
0.6
$6,452
98.8
0.8
$7,153
45.7
0.7
$6,684
61.3
%
%
%
%
%
%
AXIS
0.6
$6,215
112.9
0.7
$5,771
99.7
0.7
$6,414
99.9
%
%
%
%
%
%
Trisura Group Ltd.
0.6
$5,819
122.9
0.0
$101
0.3
$3,137
99.3
%
%
%
%
%
%
Argo Group International
0.5
$5,718
87.3
0.5
$4,300
16.2
0.7
$6,940
84.6
%
%
%
%
%
%
Motors Insurance Corporation
0.5
$5,433
20.7
1.0
$8,448
184.4
0.6
$5,797
53.7
%
%
%
%
%
%
IAT Insurance
0.4
$4,670
48.9
0.6
$5,425
56.9
0.5
$4,851
78.8
%
%
%
%
%
%
LA Farm Bureau Mutual Ins Co.
0.4
$4,438
78.6
0.5
$3,866
99.6
0.4
$4,227
127.0
%
%
%
%
%
%
Intact Financial Corp.
0.4
$4,432
167.8
0.9
$7,503
56.6
0.8
$7,815
128.1
%
%
%
%
%
%
Source: S&P Global Market Intelligence and the Auto Insurance Report database.
Loss ratio = incurred losses/direct premium earned and does not include dividends or loss adjustment expense.
Statewide Totals
$1,050,842
77.6
$858,660
82.2
$988,509
79.2
%
%
%
Please see LOUISIANA on Page 10
Group Name
Commercial Auto Insurers
Groups Ranked by Total 2022 Direct Premium Written (000)
2022
Premium
Mkt
share
2022
Loss
Ratio
2022
Louisiana
2020
Premium
Mkt
share
2020
Loss
Ratio
2020
2021
Premium
Mkt
share
2021
Loss
Ratio
2021
Progressive Corp.
16.5
$173,295
79.3
12.6
$108,456
75.5
14.5
$143,179
86.3
%
%
%
%
%
%
Skyward Specialty Insurance
8.0
$83,774
41.9
8.4
$72,447
64.6
8.2
$80,741
70.8
%
%
%
%
%
%
Travelers Companies Inc.
7.7
$81,334
60.4
8.6
$73,775
84.5
7.5
$73,628
63.9
%
%
%
%
%
%
Zurich Insurance Group
4.9
$51,950
109.4
5.3
$45,631
83.7
4.6
$45,673
122.6
%
%
%
%
%
%
Berkshire Hathaway Inc.
4.6
$48,051
39.6
5.7
$48,835
79.2
5.0
$49,658
58.2
%
%
%
%
%
%
State Farm Mutual
4.3
$45,204
90.7
2.8
$24,402
60.9
4.4
$43,499
101.7
%
%
%
%
%
%
Clear Blue Insurance
4.1
$42,828
127.6
4.9
$42,053
49.6
4.4
$43,132
58.3
%
%
%
%
%
%
American International Group
3.6
$37,493
63.2
3.2
$27,863
125.7
3.6
$35,199
86.1
%
%
%
%
%
%
Old Republic International Corp.
3.1
$32,493
94.5
2.5
$21,797
80.6
2.5
$24,337
77.1
%
%
%
%
%
%
Allstate Corp.
2.7
$28,299
124.6
2.6
$22,684
114.4
3.0
$29,414
58.2
%
%
%
%
%
%
Liberty Mutual
2.6
$27,024
89.6
2.8
$24,299
98.8
2.5
$24,755
88.1
%
%
%
%
%
%
CNA Financial Corp.
2.3
$24,399
100.2
2.7
$22,765
67.3
2.4
$23,684
97.1
%
%
%
%
%
%
Gray & Co.
1.9
$19,604
55.5
0.0
$0
2.0
$19,856
37.7
%
%
%
%
%
%
Hartford Financial Services
1.7
$18,197
87.8
1.5
$12,801
49.5
2.0
$19,241
61.8
%
%
%
%
%
%
W. R. Berkley Corp.
1.7
$17,697
61.0
1.8
$15,033
47.6
1.7
$17,121
85.0
%
%
%
%
%
%
Fairfax Financial Holdings
1.7
$17,542
60.9
1.8
$15,100
43.5
1.5
$14,722
57.3
%
%
%
%
%
%
Nationwide Mutual Group
1.7
$17,386
63.5
2.3
$19,912
102.1
1.9
$19,068
61.5
%
%
%
%
%
%
AmTrust Financial Services
1.7
$17,311
100.3
1.3
$11,182
58.4
1.4
$13,948
57.0
%
%
%
%
%
%
Chubb Ltd.
1.5
$16,024
130.0
1.8
$15,660
117.3
1.6
$15,716
150.8
%
%
%
%
%
%
EMC Insurance Companies
1.4
$15,087
57.4
1.8
$15,842
61.0
1.7
$16,521
64.3
%
%
%
%
%
%
Great American Insurance
1.4
$14,673
53.9
1.7
$14,223
77.5
1.6
$15,490
22.8
%
%
%
%
%
%
Federated Mutual Group
1.4
$14,586
47.8
1.5
$12,821
102.4
1.4
$13,664
67.0
%
%
%
%
%
%
Everest Re
1.4
$14,541
46.4
1.3
$11,235
48.7
1.1
$11,396
51.1
%
%
%
%
%
%
FCCI Mutual Insurance Holding Co.
1.3
$13,285
69.4
1.5
$12,584
60.9
1.4
$13,348
59.7
%
%
%
%
%
%
Arch Capital Group Ltd.
1.2
$12,758
69.6
1.1
$9,422
109.1
1.3
$13,185
99.4
%
%
%
%
%
%
United Fire Group Inc.
1.1
$11,999
80.4
1.9
$16,064
100.7
1.4
$13,515
86.7
%
%
%
%
%
%
STARR Cos.
0.9
$9,386
40.1
1.6
$13,852
103.3
1.4
$13,502
54.1
%
%
%
%
%
%
Hanover Insurance Group
0.8
$8,367
57.8
1.0
$8,708
114.0
0.9
$9,247
100.6
%
%
%
%
%
%
GuideOne Insurance
0.7
$7,083
39.3
0.5
$4,511
84.8
0.6
$6,329
40.7
%
%
%
%
%
%
Prime Insurance
0.6
$6,452
98.8
0.8
$7,153
45.7
0.7
$6,684
61.3
%
%
%
%
%
%
AXIS
0.6
$6,215
112.9
0.7
$5,771
99.7
0.7
$6,414
99.9
%
%
%
%
%
%
Trisura Group Ltd.
0.6
$5,819
122.9
0.0
$101
0.3
$3,137
99.3
%
%
%
%
%
%
Argo Group International
0.5
$5,718
87.3
0.5
$4,300
16.2
0.7
$6,940
84.6
%
%
%
%
%
%
Motors Insurance Corporation
0.5
$5,433
20.7
1.0
$8,448
184.4
0.6
$5,797
53.7
%
%
%
%
%
%
IAT Insurance
0.4
$4,670
48.9
0.6
$5,425
56.9
0.5
$4,851
78.8
%
%
%
%
%
%
LA Farm Bureau Mutual Ins Co.
0.4
$4,438
78.6
0.5
$3,866
99.6
0.4
$4,227
127.0
%
%
%
%
%
%
Intact Financial Corp.
0.4
$4,432
167.8
0.9
$7,503
56.6
0.8
$7,815
128.1
%
%
%
%
%
%
Source: S&P Global Market Intelligence and the Auto Insurance Report database.
Loss ratio = incurred losses/direct premium earned and does not include dividends or loss adjustment expense.
Statewide Totals
$1,050,842
77.6
$858,660
82.2
$988,509
79.2
%
%
%
Continued from Page 8
State Market Focus: LOUISIANA
Gov. John Bel Edwards, a trial lawyer whose
veto pen thwarted insurance industry reform ef-
forts.
“The pain of the insurance crisis has made
insurance the No. 1 issue at the capitol,” said
Jeff Albright, retired CEO of the Independent
Insurance Agents and Brokers of Louisiana.
“They can’t go home not having done something
to x both property and auto insurance.”
The property insurance crisis is front and
center, but Temple is equally attuned to problems
in the auto insurance market. With the nation’s
second-highest average expenditure for auto
insurance – at $1,500 in 2021 – and among the
lowest household incomes, Louisiana ranks as
the least affordable personal auto market in the
country on our PAIN Index. (AIR 3/25/24).
Since then, consumers have been hit with
rising prices on top of already expensive poli-
cies. The top 10 personal auto insurance groups
increased rates an average 17.7% last year, after
a 9.3% rise in 2022, according to RateWatch
from S&P Global Market Intelligence. The
2023 increases included 33.8% in groupwide rate
hikes by USAA and 23.0% by Southern Farm
Bureau Casualty, which is raising them another
23.0% in June.
Personal auto insurers suffered, too, with a
na
AUTO INSURANCE REPORT
Page 10
April 15, 2024
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Continued from Page 9
State Market Focus: LOUISIANA
0.3% average annual prot margin for the decade
ended 2022. According to preliminary S&P data,
the personal auto loss ratio fell to 66.3% in 2023
from 75.0% in 2022 and 75.9% in 2021.
Commercial auto per-
formance was far worse,
with an average annual
loss of 12.3% for the de-
cade. The commercial
auto incurred loss ratio
crept up to 78.2% last
year from 77.6% in 2022
and 79.2% in 2021.
The commercial auto
wreck hits certain seg-
ments harder than others,
with many truckers hav-
ing just two or three carrier options and paying
thousands more in premiums than businesses in
neighboring states. The log-hauling trucks cru-
cial to Louisiana’s important forestry products
industry, for example, continue to struggle to
obtain insurance as they work to establish a self-
insured fund authorized by 2022 legislation.
Higgenbotham transportation broker Mike
Knotts tells shell-shocked businesses with two
or three trucks that if their renewal premium is
less than $15,000 per unit, “you’re doing great.”
As costs have risen, trucking rms with
strong risk management practices and good loss
experience have moved into captives, worsen-
ing the quality of risk pool available for standard
writers. Over the last few years, Knotts has es-
tablished more than 160 captives, about 60 of
which are driven by auto liability exposure. But
even in the captive, Louisiana claims trend 55%
to 60% higher, he said.
Insurance companies settle commercial
trucking lawsuits at very high levels because of
“the insurance company’s fear of going to court
Please see LOUISIANA on Page 11
Louisiana Snapshot
Regulator: Insurance Commissioner Tim Temple
Rate regulation: prior approval
Average rate approval time (2023): 29 days;
U.S. average: 64 days
Size of personal auto market: $4.96 billion (2022
DPW) Rank: 20th
Average policy expenditure: $1,500 (2021)
Rank: 2nd
Auto Insurance Report PAIN Index rank:
1st (2021)
Property Insurance Report HURT Index rank:
1st (2021)
Auto registrations: 1.5 million (2022)
Truck registrations: 3.0 million (2022)
Vehicle miles traveled (VMT): 54.73 billion (2021)
Trac fatalities: 1.78 per 100 million VMT;
U.S.: 1.37 (2021)
Vehicle thefts: 310.3 per 100,000 residents;
Region: 321.3 (2022)
Liability defense: pure comparative fault
Minimum Insurance Requirements:
BI: $15,000/$30,000 • PD: $25,000
Safety Laws
Texting ban; cellphone ban for drivers under 18
Primary enforcement seat belt law
Motorcycle helmets required for all riders
Demographics
Population: 4.6 million (2023)
Change 2010-2020: +2.7%, U.S.: +7.4%
Median household income (avg. 2018-2022):
$57,852; U.S.: $75,149
Population density:107.8 per square mile;
U.S.: 93.8 per square mile (2020)
Sources: S&P Global Market Intelligence; NAIC;
Milliman; U.S. Dept. of Transportation; NAMIC;
U.S. Census; Insurance Institute for Highway
Safety; FBI; Matthiesen, Wickert & Lehrer
Jeff Albright
IIABL
April 15, 2024
Page 11
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AUTO INSURANCE REPORT
Reprinted With Permission Of The Publisher
in Louisiana,” Knotts said.
Bills have been moving more quickly than
usual since the Legislature convened the regu-
lar session March 11. With many compromises
hammered out before the session even started,
veteran insurance executives, as well as lobbyists
like Albright, seem condent of success.
“The Legislature is prioritizing property re-
form legislation that addresses Louisiana’s ongo-
ing homeowners and commercial property crisis
now, but we should begin seeing more action on
auto reform legislation soon,” Temple said. “Our
auto insurance has been high for so long that we
forget how much more Louisianans pay than res-
idents of other states, so I am looking forward to
working with legislators to pass auto reform and
am optimistic that we will do so this session.”
The most signicant bills for auto insurers at-
tack the excessive litigation that seems as deeply
ingrained in Louisiana culture as Monday night
red beans and rice. Litigation is a key driver of
auto insurance costs in many states, but the situ-
ation is particularly extreme in Louisiana, notori-
ous for a potent combination of dangerous roads,
prevalent lawyer advertising and elected judges.
The state highway fatality rate was 1.42 per
100 million miles traveled last year, an improve-
ment from 1.60 in 2022 but still worse than the
1.26 national average, according to preliminary
data from the National Highway Trafc Safety
Administration.
A paper published in December by the In-
surance Research Council found that Louisiana
has a higher frequency of accidents, with prop-
erty damage liability claims 16% higher than
the national average. Louisiana accident victims
are twice as likely to le an injury claim, though
the cost of claims tends to be lower because of
low limits. Temple estimated that close to half
of drivers in Louisiana have coverage with just
minimum limits of $15,000 for injury to one per-
son and $30,000 per ac-
cident, with an additional
$25,000 for property
damage liability.
The IRC also reported
that the rate of litigation
in personal auto claims
in Louisiana is more than
twice the national aver-
age, and second highest in
the country after Florida.
Eric Berger, senior
vice president for government affairs for The
Gray Insurance Co., described how these
trends play out for the Louisiana-based com-
mercial insurer that writes about half its business
in the state. In Louisiana, Gray’s commercial
auto business generates a 156% combined ratio,
compared with 99% countrywide. About 60%
of Gray’s commercial auto claims in Louisiana
include a medical component, compared with
30% countrywide, and the state’s medical costs
were 140% higher. Litigation costs are also more
expensive, averaging $44,000 per claim in Loui-
siana vs. $8,300 countrywide. In response to the
challenges in Louisiana, Berger said, Gray low-
ered the coverage limits for heavy construction
equipment from $5 million to $1 million.
Commercial auto overall “is a challenging
line,” Berger said. “But whereas the rest of the
country has a cold, we have pneumonia. And we
believe the driver of that is the collateral source
rule.” Louisiana’s collateral source rule is a
“moral hazard,” he said, in that the promise of
recovering more than the actual cost of medical
State Market Focus: LOUISIANA
Continued from Page 10
Please see LOUISIANA on Page 12
Research shows Louisiana
accident frequency is higher,
and accident victims are twice
as likely to le an injury claim.
Mike Knotts
Higgenbotham
AUTO INSURANCE REPORT
Page 12
April 15, 2024
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Continued from Page 11
State Market Focus: LOUISIANA
bills is a powerful incentive to le injury claims.
Senate Bills 244 and 18 would change that.
They would direct that evidence of the amounts
billed and the amounts paid be admissible in
court and would limit the recovery to the amount
paid. Under compromise tort reform legisla-
tion that passed in 2020, the responsible party’s
insurer must reimburse the plaintiff for 40% of
the difference between what the medical pro-
vider billed and what was paid. For example, if
the medical provider billed $200,000 but was
paid $50,000, the accident victim would recover
$60,000, which is 40% of the difference between
billed and paid amounts.
Auto insurers also strongly support SB 250/
HB 337, which would repeal the law enabling
plaintiffs to le lawsuits directly against insurers
in addition to or in place of the at-fault insured
except in very limited circumstances. Insurers
argue that insurers already pay damages caused
by their insured and that the laws invite larger
awards from a defendant viewed as a deep-pock-
eted corporation.
In the interview, Temple emphasized the im-
portance of reforming the state’s bad-faith laws,
which deter insurers from doing business in the
state. The ambiguous provisions make compli-
ance difcult, exposing carriers to attorneys’ fees
and penalties equal to 50% of damages. While
plaintiff attorneys view bad-faith laws as a vital
consumer protection against powerful insurance
companies, insurers argue they cast too wide a
net rather than capturing truly bad actors.
The most promising bill (SB 323) claries
these ambiguities, specifying a trigger – receipt
Please see LOUISIANA on Page 14
Eric Berger
Gray Insurance Co.
of a written proof of
loss – and outlining the
process and requirements
of both the insurer and
insured for good faith and
fair dealing. While pri-
marily focused on prop-
erty claims, Albright said,
the bill also would benet
auto insurers.
Temple said the bill
was the result of compro-
mises. “I think the initial pushback was ‘you’re
protecting the insurance company and not the
consumer,’” Temple said. “But this bill is fo-
cused on bringing clarity to the claims process.
… I want the consumer to have the ability to liti-
gate, should that be where they ultimately need
to go, but it shouldn’t be the rst step.”
Insurers are much less enthusiastic about a
bill promoted by the governor that would extend
the amount of time for ling suit from one year
to two. Some view it as a necessary compromise
to win passage of other tort reforms, but the
Louisiana Motor Truck Association is among
the groups opposing SB 334, concerned it gives
plaintiffs more time to pile on costly medical ex-
penses before ling suit.
HB 336 addresses a hot-button issue for in-
surers across the country: third-party litigation
nancing. The bill requires that the existence of
litigation nancial contracts be disclosed and
subject to discovery. In addition to the growing
trend of large investors, Louisiana has a home-
grown litigation-nance industry. Albright said
he has seen letters from local attorneys asking
insurance agents to become investors.
Temple has also promoted legislation (HB
613) that would eliminate Louisiana’s require-
ment that insurers receive prior approval of rates
with a 45-day waiting period, moving instead
Temple believes it is vital
to reform the state’s bad-faith
laws, which deter insurers from
writing in Louisiana.
April 15, 2024
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14
NOV 15–17
The Ritz Carlton,
Laguna Niguel
Dana Point, CA
PIRNC26
APR 12–14
The Ritz Carlton,
Laguna Niguel
Dana Point, CA
AIRNC26
APR 11–13
The Ritz Carlton,
Amelia Island
FL
AIRNC27
NOV 9–11
Waldorf Astoria,
Monarch Beach
Resort, Monarch
Beach, CA
PIRNC25
MAY 4–6
The Breakers
Palm Beach
FL
AIRNC25
NOV 10–12
The Ritz Carlton,
Laguna Niguel
Dana Point, CA
PIRNC24
Save
These
Dates!
AUTO INSURANCE REPORT
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Reprinted With Permission Of The Publisher
James Donelon
Former Louisiana
Insurance Commissioner
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Focus: LOUISIANA
Continued from Page 12
to “le and use,” with lings deemed approved
within 30 days, unless notied otherwise.
In addition to pushing legislation long sought
by insurers, Temple has sought to change the
culture of the insurance department, even as he
has kept much of the staff intact.
Over the years, Donelon “developed a style
of doing business where he wanted to make in-
surance companies behave rather than trying to
facilitate insurance companies doing business
here,” said one industry observer.
“His department was not a resource for the
industry; they were the insurance police. The
industry found the department difcult to work
with, and we have enough other problems with
legislation, litigation and regulation.”
Temple, by contrast, has put an end to the
department’s prior desk-drawer rules – including
one limiting prot targets to 10% – pushed staff
to complete rate reviews within the prescribed 45
days and issued an edict to be a more helpful re-
source for the industry. If the Legislature hadn’t
acted, Temple also would have lifted Donelon’s
policy limiting insurers to
one rate hike a year.
The new commission-
er rejects the idea that it is
his job to negotiate – and
then publicize – forced re-
ductions in insurance rate
requests that actuaries de-
termine are not excessive,
inadequate or unfairly
discriminatory.“It was po-
litical,” he said. “My po-
sition has been that what
the actuaries determine it
is, that’s what we go with.”
“I’m not doing rate suppression,” Temple
added. “If we want to go down that slippery
slope, then what’s the next business or industry
that we determine if they’re making too much
money or not? Oil companies, reneries, gas
stations, milk producers, people that sell bottled
water? Do we want government deciding what
is a proper prot for private industry? I certainly
don’t.”
Temple is condent that free-market reforms
can create a healthy market in which insurance
carriers compete for the business of Louisiana
consumers. But he counsels patience, knowing
that path to long-term solutions may involve
short-term pain for insurance buyers who face
more frequent rate hikes or lose protections from
property insurance nonrenewals.
He’s also knows some people just don’t trust
him, believing he is acquiescing to the demands
of the industry that made his family wealthy.
“I get it. The other side wants to paint me
as the fox in the henhouse,” Temple said. “It’s
a badge I have to wear, and I hope to be able to
earn a different badge by showing that this plan
works.”
AIR
