What the post-pandemic commute means for auto insurers

Canadians who relocated to suburban and rural areas to work during the pandemic are driving longer distances upon returning to work, and plan to use their cars for the work commute more often in the future, a new Aviva Canada report showed.

For auto insurance, the upshot of the post-COVID workplace may be higher claims costs or premiums, and a scenario ripe for the use of telematics.

“We’re starting to see the boomerang effect of the pandemic in terms of the distances people are driving,” said Phil Gibson, executive vice president and managing director of personal insurance at Aviva Canada. “Consumer driving distances dropped when COVID-19 first struck, due to work from home. But now return to work has translated into driving greater distances than before.”

Some of the longer driving distances relate to the ‘Great Migration’ seen during the pandemic. Fully 60% of Canadians have relocated as a result of the pandemic, with those working from home (26%) flocking to the suburbs or small towns, the study found.

Now that Canadian provincial governments are lifting COVID-19-related restrictions, 47% of workers said they’ve fully returned to their workplaces outside of home since the early 2022. Twenty-five per cent said they adopted the hybrid mode of work, with their weeks split between working from home and at the office. The remaining 28% of people reported they’re now working permanently from home.

That makes driving the most popular form of commute among 52% of Canadians, the study suggested.

“When looking at the future of the commute, many Canadians who currently aren’t driving are anticipating using a motorized vehicle in the next 12 months (54%), increasing the number of commuters on the road for both business and leisure activities, and 23% of Canadians are expecting their mileage to increase,” said Aviva’s report.

After becoming accustomed to social distancing over the past two years, the urge to crowd into public transportation right now is waning, the report found.

“Canadians’ attitudes towards using public transportation since the pandemic may have changed for good,” noted the Aviva report, How We Live. “In 2021, close to 60% of Canadians said they were not at all likely or unlikely to use public transportation in the future. Now, 18% of Canadians said they’ve changed the way they commute compared to before the pandemic.”

Commissioned by Aviva Canada, the survey was conducted by Leger through an online survey with 2,500 Canadians older than 18 who currently own homes or rent in Canada. The survey was carried out between Mar. 18 and Apr. 5, 2022. The results are considered accurate within plus or minus 2 percentage points, 19 times out of 20.

The return to work has insurers touting the use of telematics or usage-based insurance programs as a way for Canadians to save on car insurance. And here, based on Aviva Canada’s survey results, it sounds like brokers could be doing more to advise their clients about such programs.

“Only 33% of Canadians say they are aware of these types of programs that help them save on their insurance premiums, while only one in 10 use it,” the report found. “Among users, those aged 18 to 34 are much more likely to be involved in the program than those who are 35 or older. Younger Canadians and those working from home are also more likely to say they are interested in using this type of program than older generations.”

Feature photo courtesy of iStock.com/anyaberkut

Editors Note: Canadian Underwriter will be following up Tuesday with a report on how trends in the post-pandemic world will affect home insurers.