Accident claims plummet, baffling insurers

Crain's Chicago Business reports:

American drivers are reporting fewer crashes to their insurance companies than ever before, and nobody knows precisely why.

Fewer claims mean record profits for auto insurers like Allstate Corp. and State Farm Insurance Cos. The unprecedented decline in auto claims — a four-year, 15% drop — has allowed the insurers to reap huge earnings from underwriting, without raising premiums.

In the first six months of this year, Northbrook-based Allstate's sales rose 3% from the year-earlier period. Car insurance premiums, which make up 51% of sales, rose just 2%. But Allstate's net income increased 13%, due to an underwriting margin — premium revenue minus claim payouts and other costs — that one Wall Street analyst called "the best result we have ever seen from the company."

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