Auto Insurance Task ForceHCR 47/SCR 55 of the 2018 Regular Session

State of the Automobile Insurance Market: Quick Facts (as of December 31, 2017):

• The voluntary market remains competitive but challenging for both private passenger auto (PPA) and commercial auto (CA).

• There is little competition for some commercial trucking programs, e.g. logging.• The Greater New Orleans and Baton Rouge areas continue to pay the highest

rates.• Market-wide insurance premium increase for 2017:

• PPA—9.0% following 8.7% in 2016• CA—5.6% following 2.8% in 2016

• In 2015, Louisiana ranked highest in PPA combined average cost of insurance at $1,405 for liability and physical damage coverages according to the most recent NAIC data.

Louisiana Department of Insurance

Comparison of Requested Change (before action is taken) toMarket Impact of Approved Changes

All Filing Types - Private Passenger Automobile

4.0%

3.0% 2.9% 2.8%

5.0%

7.4%

6.0%

5.5%

7.2%

8.9%

8.1%

1.0% 0.9%0.5%

0.2%

2.7%

4.7%

3.4%

5.9%

8.7%

8.7%

1.8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (JUL)

Average Requested Change Market Impact of Approved Changes

The LIRC is abolished; all filings go to the LDI as of January 1, 2008

Louisiana Department of Insurance

Comparison of Requested Change (before action is taken) toMarket Impact of Approved Changes

All Filing Types - Commercial Automobile

1.7%

-2.2% -2.4%

-0.7%

3.1%

2.0%

5.1%

7.5% 7.2%8.0%

13.3%

0.4% 0.4% 0.1%

1.1% 1.5%

2.8%2.2%

3.2%2.8%

5.5%5.8%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (JUL)

Average Requested Change Market Impact of Approved Changes

The LIRC is abolished; all filings go to the LDI as of January 1, 2008

Silver Medal Premiums

• 2nd highest average overall premiums.

• 2nd highest average collision premiums.

• 6th highest average combined liability premiums.

• 8th highest average comprehensive premiums.

41.4%

30.4%

47.7%

$-

$100

$200

$300

$400

$500

$600

$700

$800

Liability Collision Comprehensive

US Average LA Average

Auto Insurance Rates by State for 2017(Source Insure.com)

1 Michigan $2,3942 Louisiana $1,9213 Connecticut $1,897

4 Rhode Island $1,848

5 Florida $1,8406 DC $1,6967 California $1,6738 Wyoming $1,5389 Delaware $1,526

10 Texas $1,50611 Oklahoma $1,47612 Georgia $1,44013 Arkansas $1,40914 New Jersey $1,375

15 West Virginia $1,369

16 Kentucky $1,365

17 New York $1,35218 Colorado $1,35119 Arizona $1,34820 Nevada $1,34221 Maryland $1,32722 Mississippi $1,326

Avg. National $1,318

23 Pennsylvania $1,313

24 Oregon $1,30825 Hawaii $1,294

26 North Dakota $1,291

27 South Carolina $1,286

28 Massachusetts $1,242

29 Minnesota $1,24130 Alabama $1,22631 Montana $1,21732 Washington $1,216

33 New Mexico $1,20134 Kansas $1,19235 Tennessee $1,18636 Illinois $1,15937 Wisconsin $1,15438 Alaska $1,132

39 New Hampshire $1,124

40 Nebraska $1,11241 Missouri $1,10742 Utah $1,068

43 South Dakota $1,058

44 Virginia $1,04045 Indiana $1,02146 Iowa $1,017

47 North Carolina $1,010

48 Vermont $94849 Idaho $94250 Ohio $91951 Maine $864

Top 10 Most Expensive and Least Expensive States for Automobile Insurance, 2014 (Source: NAIC)

Rank Most expensive Average Rank Least expensive Average

1 New Jersey $1,263.67 1 Idaho $571.942 Michigan $1,227.36 2 Iowa $585.713 New York $1,205.03 3 South Dakota $601.334 Louisiana $1,192.92 4 Maine $606.905 District of Columbia $1,192.45 5 North Dakota $630.246 Florida $1,140.84 6 Indiana $642.197 Delaware $1,125.74 7 North Carolina $643.848 Rhode Island $1,106.08 8 Wisconsin $646.489 Massachusetts $1,035.52 9 Nebraska $662.83

10 Connecticut $1,031.70 10 Vermont $665.17

Top 10 Most Expensive and Least Expensive Cities for Auto Insurance, 2014 (Source: Nerdwallet)

Rank Most expensive cities Average cost Rank Least expensive cities Average cost

1 Detroit, MI $10,723 1 Winston-Salem, NC $9692 New Orleans, LA $4,310 2 Greensboro, NC $1,0903 Grand Rapids, MI $4,042 3 Raleigh, NC $1,0984 Newark, NJ $3,525 4 Durham, NC $1,1015 Baton Rouge, LA $3,364 5 Charlotte, NC $1,1236 Hialeah, FL $3,272 6 Boise, ID $1,2227 Jersey City, NJ $3,267 7 Rochester, NY $1,2498 Louisville, KY $3,256 8 Fayetteville, NC $1,2959 Miami, FL $3,169 9 Spokane, WA $1,30810 Philadelphia, PA $2,931 10 Montgomery, AL $1,376

Auto Loss Trends

58.0%

60.0%

62.0%

64.0%

66.0%

68.0%

70.0%

72.0%

74.0%4Q Moving Direct Loss Ratio

Personal Commercial Average 2001-2016

3Source: SNL Financial (S&P Global Market Intelligence)

Frequency Severity

Quarter-Over-Quarter Year-Over-Year

Quarter-Over-Quarter Year-Over-Year

BI -0.90% -2.85% 2.2% 7.7%

PD 0.15% 0.53% 0.9% 4.2%

PIP -0.71% -0.42% 2.16% 3.25%

COMP -0.75% -1.26% -0.19% 11.14%

COLL 0.45% 2.11% -0.50% 2.07%

Source: ISS/NISS/ISO Personal Auto Fast Track Data 2017 Q2

Causes Solutions

4

Urban Congestion & Road Conditions

Device Distractions

Extreme Weather Events

Speed Limits

Impaired Driving

Infrastructure Investment

Handheld Bans &Primary Enforcement

Weather Warning Systems

Lower Speed Limits

Education & Enforcement

Tort ReformLitigation Environment

Traffic Congestion

22

23

24

25

26

27

28

LA US

Min

utes

Average Metropolitan Area Commute Time

2008 2016

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Average Annual Delay (Hrs) per Auto Commuter

Baton Rouge New Orleans

Distracted Driving

6

Extreme Weather Events

Tort Environment

$0$5,000

$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000

LA MD HI RI VA AL NH OK OR AK CT KY AR WV

Jury Trial Threshold

Select 2018 Legislative Activity

• HB 619 by Huval to expand the distracted driving laws to all drivers and to make operating a handheld device unlawful. (Died in the Senate)

• HB 700 by McFarland to repeal and replace the “seat belt gag rule” to permit evidence of nonuse of seat belts for mitigation of damages. (Died in the Senate)

• HB 789 by Thibaut to limit the collateral source rule (Died in House Committee)• SB 139 by Luneau to permit direct action in cases involving certain small

businesses (Died in the Senate)• SB 441 by Morrell to create the crime of “reckless operation of an off-road

vehicle.” (Act 495)