Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading How Can You Meet Your Clients’ Needs During a Hard Market?. This week we’re bringing you:
Today’s Teens Are in No Rush to Start Driving*
Michael Andretti has a 21-year-old son with zero interest in obtaining a driver’s license. Rideshare apps get him where he wants to go.
In New Jersey, the 16-year-old daughter of a local short track racer took a five-minute driving lesson on a golf cart through their yard before turning over the keys. “That’s it, I’m done. Don’t like it,” Kat Wilson told their father.
The teenage rite of passage of rushing to the DMV on one’s birthday to get that plastic card that represents freedom has changed dramatically over the last 30 years. Data collected from the Federal Highway Administration and analyzed by Green Car Congress showed that in 2018 approximately 61% of 18-year-olds in the U.S. had a driver’s license, down from 80% percent in 1983. The number of 16-year-olds with licenses decreased from 46% to 25% in the same period.
The trend that began with millennials has been amplified by Generation Z, with teens citing myriad reasons for putting off or avoiding getting a driver’s license. Some prefer more environmentally-friendly transportation options, some found driving too stressful and some just don’t care about cars.
The pandemic closed New York State motor vehicle offices, but Ian Hoffman said he had his permit but could take the train into the city when needed. He’s headed this fall to his freshman year at the University of Miami with no pressing need to legally formalize his ability to drive. In suburban Boston, high school senior Celeste Robinson has relied on friends with cars or public transportation.
“There is the question of independence, at least that’s what I’m told all the time,” Robinson said. “But I’m an anxious person and driving does seem intimidating to me. I’ve tried it and it just feels very hard. And I do love public transportation, so I plan things very much in advance and make sure I can get a train there.”
Although market research firm J.D. Power found that millennials accounted for 32% of new car sales in 2020, higher than any other age group and ahead of baby boomers for the first time, Gen Z is content waiting for wheels.
Insurance rate hikes sharpen in July*
Insurance rate increases accelerated slightly in most lines in July, with only workers’ compensation prices decreasing, according to data from insurance exchange Ivans Insurance Services, a division of Tampa, Florida-based Applied Systems Inc.
Commercial property insurance saw the largest rate hikes, with average rates increasing 5.8%, up from 5.68% in June; umbrella rates rose 4.73%, up from 4.6%; business owners policy rates climbed 4.87%, up from 4.66%; and general liability rates rose 4.17%, up from 4.07%.
Commercial auto rates increased 4.19%, down from 4.28%.
Workers comp rates slipped 1.93%, compared with a 2.06% decrease in June.
Amazon reveals massive insurance partnership*
Marsh has entered into a new partnership with Amazon to help small business sellers get affordable product liability coverage.
The brokerage giant has collaborated with Amazon on its new digital insurance network, Amazon Insurance Accelerator.
To help third-party sellers more easily and affordably secure product liability insurance, Marsh curated a panel of leading insurers of small commercial businesses and secured digital insurance distribution providers to support Amazon Insurance Accelerator.
A new mandate from Amazon requires third-party sellers to secure product liability coverage after reaching $10,000 in sales in one month, rather than three months, on Amazon.
Through the new Amazon Insurance Accelerator, US-based small business sellers can get product liability quotes and purchase a policy that meets their needs and Amazon’s new coverage requirements.
Insurers participating in the Accelerator include Chubb, Harborway Insurance underwritten by Spinnaker Insurance Company, Hiscox, Liberty Mutual Insurance, Markel, and Travelers. The policies are made available digitally by Bold Penguin and Simply Business, Inc.
“Product liability insurance allows Amazon sellers to focus on scaling their businesses, knowing they are protected should one of their products accidentally cause bodily harm or property damage. However, finding the right insurance policy at the right price — especially for new business start-ups — can be a daunting task,” said Anita Sathe, US Affinity Leader, Marsh.
Finding highly affordable leads to keep sales coming in
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