Distracted Driving on the Rise and Impacting Combined Ratios

Experts weigh benefits, risks of using telematics to combat the trends

January 31, 2024 Photo

Distracted driving occurrences have increased an average of 30% per mile from 2019 to 2023, according to a recently released report by Triple-I, titled, “Distracting Driving: State of the Risk.”

“As drivers returned to the roads following the pandemic, distracted driving surged, causing higher rates of accidents, injuries, and deaths,” Dale Porfilio, chief insurance officer, Triple-I, tells CLM. “This high-risk behavior has worsened in the years since, having huge implications for the insurance industry and their policyholders.”

However, telematics offers hope when it comes to reversing these trends. According to the report, “Telematics, which can help insurers understand drivers’ risk profile and tailor auto insurance rates based on driving habits, has demonstrated high levels of efficacy in deterring unsafe driving habits—including distracted driving.”

Effects of Distracted Driving

Distracted driving includes visual distractions, manual distractions, and cognitive distractions.

“The effects of distracted driving are contributing to the net combined ratio for personal auto—a measure that demonstrates profitability in a particular line of insurance,” according to the report. “The industry’s personal auto combined ratio soared past 100 in 2022, primarily due to inflationary loss pressures and the increase in accidents caused by distracted driving.”

These developments, the report continues, have worsened over the past few years. According to telematics service provider Cambridge Mobile Telematics (CMT), “Distracted driving in the [U.S.] increased more than 20% from February 2020 to February 2022, as traffic levels returned following the early months of the pandemic. Still, the level of distraction in crashes is widely believed to be underreported.” CMT also estimates that “every 10% increase in distracted driving kills over 420 people and costs the American economy $4 billion every year.”

The Biggest Culprit

The number one contributor to distracted driving is cellphone usage, the Triple-I report states. “A total of 2.5% of drivers stopped at intersections were talking on hand-held phones at any moment during the day, according to a 2021 national observational survey from the U.S. Department of Transportation.” This, along with “self-reported data on hand-held and hands-free phone use has prompted the U.S. federal government to approximate that 7.6% of drivers were using a hand-held or hands-free cellphone during any moment of the day.”

The survey also found 3.4% of drivers were observed manipulating hand-held devices, with the highest rate among the 16-24 age range at 4.5%. Furthermore, “A GHSA study also found that cellphone use—dialing, texting, and browsing—were among the most prevalent and highest-risk behaviors,” causing 11% of fatal crashes in 2020 and resulting in 354 deaths, according to the National Highway Safety Transportation Administration (NHTSA).

The Role of Telematics

“An Insurance Research Council survey found that 45% of drivers said they made significant safety-related changes in how they drove after participating in a telematics program,” according to the Triple-I report. “Another 35% said they made small changes in their driving behavior.” Furthermore, policyholders “became more comfortable allowing their driving to be monitored in exchange for potentially lower insurance costs during the onset of the pandemic.”

The number of insureds willing to have their insurance costs adjusted based on telematics continues to increase, the report shows. In a survey by Arity of 875 licensed drivers over the age of 18 in May 2019, “Between 30 and 40% said they would be either ‘very’ or ‘extremely comfortable’ sharing this data. In May 2020, Arity reran the survey with over 1,000 licensed drivers, with the study revealing a year-over-year increase of over 12%.”

Porfilio says, “If telematics can influence drivers to change behaviors and reduce the number of accidents, the nation’s roadways will be safer, and auto insurance can be more affordable.”

CLM member Teresa M. Beck, managing shareholder of AZ and NV, DEIB committee co-chair, Klinedinst PC, sees the benefits of using telematics for this purpose, but urges caution when it comes to collecting and storing drivers’ data. “The concept of telematics and using data combined with insurance premiums to encourage safer driving habits is brilliant,” she notes. “However, there are significant concerns about data privacy…and how such data will be used by the industry relative to individual consumers. There are also legal concerns about what could be a treasure trove of potentially relevant data in consumer car accidents, which could make litigating such cases more expensive.  

“The concept of telematics for the insurance industry seems relatively new and these are issues we can watch for in the future to ensure the technology is used most effectively and with appropriate protections for consumers. Perhaps there are other ways to encourage less distracted driving that would also be effective, like stiffer penalties and public service messaging on social media. It seems we need a culture shift to encourage drivers to put devices away when driving, and that may have to be tackled from multiple angles.” 

About The Authors
Angela Sabarese

Angela Sabarese, Associate Editor of CLM. angela.sabarese@theclm.org

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