Missouri auto study rebuts 2017 ProPublica story

By Michael Barry, Senior Vice President Media Relations and Public Affairs, Insurance Information Institute

ProPublica’s investigative story last year on auto insurer pricing in four states—California, Illinois, Missouri, and Texas—will be seen in a different light, at least when it comes to Missouri, following this month’s meeting of the National Association of Insurance Commissioners’ (NAIC) Auto Insurance Working Group in Boston, MA.

To refresh everyone’s memory, ProPublica’s April 2017 report alleged “some major insurers charge minority neighborhoods as much as 30 percent more than other areas with similar accident costs.” The I.I.I. pushed back immediately, calling ProPublica’s assertions “inaccurate, unfair and irresponsible.” Moreover, the I.I.I. sponsored research by a leading actuarial firm, Pinnacle Actuarial Resources, which found “multiple concerns” with the methodology ProPublica employed when arriving at its findings.

The NAIC heard from Missouri’s Angela Nelson on Saturday, Aug. 4.  Ms. Nelson said her state’s Department of Insurance, Financial Institutions, and Professional Registration (DIFP) found “no evidence” Missouri’s private-passenger auto insurers were employing discriminatory pricing practices while also determining in a comprehensive July 2018 assessment of Missouri’s auto insurance market the following trends:

  • When adjusted for inflation, the typical Missouri driver has seen a 17 percent decrease in their auto insurance premiums since 1998.
  • Premium levels for liability coverage are two-times higher in Kansas City and St. Louis than they are in the rest of the state.
  • About 13.7 percent of Missouri’s drivers are operating vehicles while uninsured; this tracks closely to the Insurance Research Council’s estimate of 14 percent.