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Dr. Scott Moore, Associate Dean of the Boler College of Business, was recently featured in the “Ask The Experts” section of an article on WalletHub, regarding consumer demand for car insurance during the pandemic.

“Two countervailing factors come into play,” said Moore. “First commuting and miles are driven, especially early in the pandemic fell, reducing exposure. Several major insurance carriers adjusted rates downward to reflect reduced exposure. Second, as people substitute away from public transportation toward private transportation, loss exposure increases, and demand for coverage increases. It would be straightforward, though not necessarily easy, to estimate quantitatively the balance of these two effects.”

Further, Moore provided his thoughts on if companies have given consumers large enough refunds on their rates during the pandemic:

“This is a bit of a loaded question. What I think about the size of refunds is (or should be) of limited interest. A good question for analysis would be whether the rebates are equivalent to the change in loss adjustment expenses companies incurred over a given time. This could be reasonably determined quantitatively.

In general, uncertainty about the changing nature of the exposures insurance carriers underwrites along with the market rigidities and consumer switching costs make it seem likely, though hardly certain, to me, that rebates would be below the carriers’ saved loss adjustment expenses. But that is (almost) pure speculation.”

When asked if car insurance companies try to mislead customers, Moore added:

“Insurance is a complex product that is subject to differentiation and therefore branding. Branding seems to be a significant motive for the advertising of insurance services.”

Read the full article here.


About the Boler College of Business

The John M. and Mary Jo Boler College of Business at John Carroll University offers undergraduate and graduate level coursework across a variety of disciplines, including the Donnelly School of Leadership and Social Innovation and the Kramer School of Accountancy and Information Sciences. Boler retains dual AACSB accreditation in business and accounting, a distinction held by only 12% of institutions in the United States. The College was ranked #1 in the nation for career preparedness by a survey of employers in Bloomberg Businessweek.