TransUnion Insurance Research Highlights Link Between 13% Decrease in Traffic Enforcement and 22% Rise in Driving Fatalities
Insurance Summit research presents a new world of risks for carriers, including changes in personal and commercial driving patterns
Since the onset of the pandemic, traffic violation citations have decreased nationally by 13%, while the death rate for motorists has increased 22%. This trend is in comparison to the 12-month pre-COVID average (January through December 2019), according to TransUnion (NYSE: TRU) research.
This negative correlation, along with several other concerning trends in driving behaviors, is detailed in a collection of studies presented at TransUnion’s annual Insurance Summit. The full findings are available in the quick guide, Life on the Road: How Better Data Helps Carriers Respond to an Altered Driving and Law Enforcement Landscape.
Ultimately, without traffic violation data, insurers aren’t able to accurately assess and underwrite a driver’s risk. With the compounding cost from accidents, carriers are now increasing rates for everyone, meaning we are all paying for this problem.
“Among many important takeaways from this research is the plain fact that traffic enforcement plays a role in maintaining safety on the road,” said Mark McElroy, executive vice president and head of TransUnion’s insurance business. “That said, insurers can play a vital role in reversing this trend by educating their customers and promoting safe driving practices.”
The research was conducted using traffic court record data from TransUnion’s TruVision™ Driving History solution to measure the number of driving violation cases from January 2019 through January 2023. That data was compared against death rates calculated by the U.S. Department of Transportation and National Highway Traffic Safety Administration over the same period.
In addition to a decline in traffic enforcement, the research found three primary behavioral factors contributing to the rise in fatalities. Since 2019, there has been a 21% increase in the number of fatal crashes involving unrestrained occupants, an 18% increase in alcohol-impaired fatal crashes, and a 17% increase in fatal crashes involving speeding.
Related, a TransUnion survey of 3,000 adults conducted in March 2023 revealed several alarming attitudes and behaviors, particularly among Gen Z and Millennial drivers.
Generational Attitudes on Risky Driving Behaviors
|Speeding 20+ MPH over the speed limit on a major highway or freeway is acceptable|
|Speeding 10+ MPH over the speed limit in a school zone is acceptable|
|Agree that, for short trips, it is not necessary to wear a seatbelt|
|Agree that there were times when my blood alcohol content was over the legal limit when driving|
|Sometimes, often or always text while driving|
“Younger drivers are often more prone to risky behaviors, but it is especially concerning to see Millennials—who are predominantly in their 30s and 40s—express such a lax attitude toward safety,” said McElroy. “It’s important they understand that this behavior is contributing to 50,000 preventable deaths every year.”
The impact on insurance rates
The study also highlighted the predictive nature of prior violations for projecting future auto insurance losses. In 2019, 42% of accidents involved drivers who had traffic violations within the prior three years. In 2022, that number jumped to 51%— meaning the predictive power of using prior violation history to project future auto insurance losses has increased during this period despite a lower number of total violations issued.
When considered along with the impact of decreased traffic enforcement, this finding illustrates the potential impacts to insurance premiums and losses. Due to a lower number of violations issued starting in 2020, auto insurers are capturing fewer dollars in surcharge premiums, thereby contributing to negative premium trends. Based on its research, TransUnion estimates the falling rates of traffic violations starting in 2020 have cost the auto insurance industry an estimated $200 million per year in lower premium capture.
On top of that, the rise in severe accidents resulting in fatalities has caused the amount that insurers have paid for medical bills, legal fees, repairs, and replacements to skyrocket. The result underscores the importance for insurers to access court records through solutions like TruVision™ Driving History, but also for police departments to increase enforcement to document and curb dangerous driving behaviors.
“Ultimately, without traffic violation data, insurers aren’t able to accurately assess and underwrite a driver’s risk,” said McElroy. “With the compounding cost from accidents, carriers are now increasing rates for everyone, meaning we are all paying for this problem.”
Employee turnover flags commercial driver risks
In a separate study, researchers examined the link between employment trends since the onset of the pandemic and commercial driver risks, finding that newly hired drivers were, on average, seven years younger and had 11% higher traffic violation rates compared to all commercial drivers (37% vs 26%, respectively).
This matters as labor force turnover and business growth have led to a situation in which four out of ten commercial drivers are new hires—impacting the risk profile of businesses that employ commercial drivers. Researchers found that companies with high employee turnover and those experiencing growth were both more likely to have outsized risk, compared to their existing premiums.
“Whether through growth or turnover, insurers need to pay attention to new hires,” said Patrick Foy, senior director of commercial insurance for TransUnion’s insurance business. “By leveraging the right data, insurers can reassess their customers and set premiums at an appropriate level.”
Solutions like TruVision™ Driving History enable insurers to continually monitor changes within their books of business to understand how new drivers might affect their employer’s overall level of risk without the need for costly motor vehicle records. In addition, insurers can offer their customers telematics programs to help monitor driving behavior and promote safe practices and an overall culture of responsibility.
The full findings are available in the quick guide, Changing Lanes: A forward-Leaning Look at the Shifting Dynamics of the US Workforce, Technology and Society, and Their Impacts on Commercial Insurance.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company with over 12,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business