automobile insurance
Rates Continue to Climb According to InsWeb automobile insurance
Index
While
Rate of Growth has Slowed, Increases are Now Impacting America's
Safest Drivers
InsWeb
Corporation (ticker: INSW, exchange: Nasdaq)
SACRAMENTO,
Calif., November 21, 2002 - InsWeb Corp., one of the largest
producers of automobile insurance in the U.S., today announced
the results of the InsWeb automobile insurance Index, a quarterly
study designed to identify and track general pricing trends
of personal automobile insurance sold through the Internet. Prices
for automobile insurance nationwide continued to rise in the third
quarter of 2002, representing a 7% increase year over year.
The index
grew less than 1% on a sequential basis, however, indicating
that prices may be stabilizing for the near-term. Reasons
for the industry's steady rate increases include rising claims
costs driven primarily by medical costs, significantly higher
vehicle repair costs, rising jury awards and continued fraud
and abuse. Additional causes may include lower investment
income generated by insurers, mainly due to the dramatic reduction
in interest rates and the decline in the stock market.
Trends
InsWeb's data for the third quarter of 2002 also revealed
an apparent shift among automobilerier offerings to consumers in
the "Over 30" age group, traditionally considered America's
safest drivers and the industry's most preferred customers.
While these consumers continue to be offered a greater number
of 12-month policy quotes and lower than average premiums,
data from InsWeb's marketplace indicates that these age groups
experienced the highest increase in premiums in the third
quarter as compared to the second quarter of 2002.
Additionally,
as in the second quarter of 2002, the majority of quotes viewed
by consumers during the third quarter of 2002 were for 6-month
policies. Nearly 60% of the roughly 1.3 million quotes viewed
were for 6-month policies, as compared to less than 44% during
the same period last year.
"The good
news for consumers is that the rate of increase has slowed,
but conversion to six-month policies continues apace, and
now drivers of all ages are feeling the impact of this year's
rate hikes," said Hussein Enan, Chairman of InsWeb Corporation.
"Now more than ever, consumers of all ages need to research
offerings from competing providers to ensure that they are
getting the best possible rates and terms. Conversion to a
6-month policy can impact an individual policy-holder's annual
costs by up to 40%."
Composition
of the Index
The nature and size of InsWeb's online marketplace enables
the company to collect a wealth of demographic and product-related
characteristics that it believes may be beneficial as broad
indicators of pricing and other trends for the automobile insurance
industry. The index is calculated from quotes viewed at InsWeb
by consumers in all states (except those in New Jersey, Massachusetts
and North Carolina) for both 6-month policies and 12-month
policies; it is a weighted average of the separate indices
for 6-month and 12-month policies, respectively. In each of
the 11 quarters analyzed to-date, the index is based on at
least 0.5 million quotes, with an average of 1.3 million quotes
analyzed in each of the quarters of 2002. While the index
itself will be calculated on a quarterly basis, the intention
is to track and monitor pricing on an annual basis, with quarterly
data providing potential early insight into pricing trends,
subject to short-term geographic and demographic changes by
both automobileriers and consumers at InsWeb. The information will
also be posted on InsWeb's site at www.insweb.com/about/automobile-index.htm.
About
InsWeb
InsWeb (Nasdaq: INSW) enables consumers to compare multiple,
actionable quotes for automobile, term life, health, homeowners,
renters and condominium insurance offerings from many of the
nation's highly rated insurers. The top-rated online insurance
marketplace also provides live customer service, interactive
tools and independent research. Headquartered in Sacramento,
Calif., InsWeb is accessible at www.insweb.com
Disclaimer
While the InsWeb automobile insurance Index is a broad indicator
of pricing activity in the personal automobile insurance marketplace,
it is not a comprehensive index as it reflects only the pricing
activity of automobileriers that have participated in the InsWeb
automobile insurance marketplace and the aggregate profile of consumers
who shop at InsWeb. From time to time, and often on a quarterly
basis, these influencing factors can change quite significantly,
and therefore affect the composition of the index. As such,
the index may fluctuate widely from quarter to quarter, and
it is not InsWeb's intention to measure and analyze quarter
over quarter changes in an in-depth fashion. In addition,
prices for automobile insurance vary from state to state, as well
as within a state, and are heavily dependent on an individual's
risk characteristics and the particular coverage that individual
desires. It is impractical, if not impossible to identify
all major components of the index and adjust for the changes
in those components on a quarterly basis. In addition, the
index itself is a function of which quarter is used for the
base. As an example, if the index were to be constructed using
Q300 as the base instead of Q100, the average annual increase
would have been about 11%
"INSWEB"
is a registered service mark of InsWeb Corporation. All marks
above are those of InsWeb Corporation, except for those of
insurance insurers, brokers, agents, industry organizations,
financial institutions, online partners, service providers,
other mentioned companies and educational institutions, which
are the marks of their respective entities.
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