Young drivers represent both a risk and an opportunity for insurers. On one hand, they tend to get in more accidents, and are particularly prone to distracted driving with smartphones. On the other hand, they represent a new generation of drivers who can bring lifetime value to insurers, especially if they can become loyal customers and safe drivers.

So-called “millennials” – drivers under the age of 35 – represent roughly 30 percent of drivers on the road today. These young drivers have grown up with the Internet, and are rarely without their smartphones. Unfortunately, using a phone while driving is one of the largest contributors to accidents on the road. Our data shows that, looking at almost a thousand crashes from hundreds of thousands of drivers, drivers who use their phone extensively while driving are 7.3 times more likely to get in an accident compared to drivers who do not. This increase in distracted driving may have directly influenced the recent surge in number and severity of auto insurance claims, which represents the first time in decades that our roads have become less safe. These increases have adversely affected the profitability and loss ratio of insurers.

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