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For those in the insurance industry and those who observe it, the reasons behind the poor results for personal auto in recent years are no mystery: more cars on the road driving more miles, higher medical costs, higher repair costs for newer vehicles and — while difficult to estimate its precise effect — distracted driving.

The degree of impact these factors have had on frequency and severity trends, however, has perhaps caught many insurers off guard. Jim Lynch, chief actuary and vice president of research and information services at the New York City-based Insurance Information Institute, says the industry enjoyed a long period of low claims frequency and mild severity. As the U.S. emerged from the Great Recession, claims frequency began to increase. Insurers reacted by raising rates, but then, more recently, severity spiked.

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