There is more nuance. It’s actually because an insurance company is required to pay a certain percentage of premiums out for claims. In health insurance, there

There is more nuance. It’s actually because an insurance company is required to pay a certain percentage of premiums out for claims. In health insurance, there is the “80/20” rule where at least 80% of premiums are required to be paid as claims. Auto/property has similar rules set by relevant state insurance commissions. If claim volume drops, they means they don’t get to necessarily keep the extra “profit.” I am not familiar with the rules around auto (I used to be a disaster home/property claims adjuster,) but I suspect auto rules are similar. It isn’t about risk being reduced, but more about claims payouts being projected less than the premium rates have accounted for. Insurance companies actually want lower rates — it means they sell more insurance which further deepens the risk pool.