The coronavirus crisis has caused a dramatic reduction in cars on the road. The rate at which they return as the pandemic subsides remains to be seen, Allstate CEO Thomas Wilson said Tuesday.
“What we don’t know is what will happen when we come out of this,” Wilson said on CNBC’s “Squawk Alley.”
People who began to work at home during the pandemic may decide they want to continue doing so and only go to the office three days a week, Wilson said.
“So will driving be down two-fifths instead of five-fifths? We don’t know on that part of the driving yet,” he said.
The coronavirus-related reduction in driving really began to appear in the third week of March, according to Wilson. He said at this point, driving is down around 35% to 50%, depending on the state. “People stopped driving pretty much on their own,” he said.
“Even when you look at shelter-in-place rules versus non-shelter-in-place states, driving still went down a lot because people drive to go to work about a third of the time,” he said. “A third of the time is for errands and a third of the time is to see friends. So at least two of those got cut back substantially as a result of this.”
Wilson also said it’s unclear how short-term driving reductions will influence long-term trends around personal car ownership. Less people over time will own cars, he said, but “whether this will accelerate it or not, I’m not sure.”
“Certainly the world is going to be different,” he added.
A car moves along an empty highway during the coronavirus disease (COVID-19) outbreak in Seattle, Washington, March 30, 2020.
David Ryder | Reuters
Allstate accesses driving data on 23 million cars each day, Wilson said, and the data also sheds light on the driving behaviors of those who are still on the roads.
“The people who are still driving are driving a little faster,” he said. “Maybe that’s cause nobody’s there but we don’t know whether they will have more accidents.”
In general, however, the reduction in driving has led to a fewer accidents and by extension fewer auto insurance claims.
Wilson said in response, Allstate this week launched a program to return portions of insurance premiums to customers. All of Allstate’s auto insurance customers will get back 15% of their monthly premiums in April and May, he said.
“They can have it on their credit card or they can put it in their checking account,” Wilson said, adding Allstate wanted to ensure it was treating its customers fairly during the pandemic. “We’ve worked to give them money because they really need it at this point in time.”